CURRENT AFFAIRS | 27 MAY 2026
An internal vigilance investigation at HDFC Bank — ordered in late 2024 by Audit Committee chairman M D Ranganath — has found that the bank paid Rs 45 crore in excess interest to the Maharashtra State Road Development Corporation (MSRDC) and disguised the outflow as a “road safety drive sponsorship” routed through four marketing vendors. The discovery is widely seen as the trigger for the abrupt resignation of Chairman Atanu Chakraborty on 18 March 2026, who cited practices “not in congruence with my personal values and ethics”.
How the scheme was allegedly engineered
According to the internal report reviewed by the Indian Express:
- Step 1 (2021): Bank approached MSRDC seeking a Rs 25,000-crore deposit from its land acquisition fund.
- Step 2: MSRDC told the bank it was getting 6% from other lenders; the bank agreed despite its published deposit rates being 3.5%–6.01%.
- Step 3: The differential of 2.51% was paid via the Marketing Department by raising sponsorship invoices through four vendors, with GST and TDS components built in.
- Step 4 (Feb 2022 onwards): MSRDC began placing deposits; the bank disbursed Rs 45 cr in batches between FY24 and FY25 through these vendors.
CLAT angle — Banking law trifecta
This story stress-tests three statutes a CLAT aspirant must know cold:
- Banking Regulation Act, 1949 §29A — bars banks from offering differential or “negotiated” returns to individual depositors outside published rate cards.
- RBI Act, 1934 — RBI’s parent statute; combined with the BR Act, it gives RBI supervisory + enforcement powers, including monetary penalties under §47A BR Act.
- Companies Act, 2013 §177 — mandates the Audit Committee (chaired by M D Ranganath here) and gives whistle-blower mechanism statutory teeth.
Key Facts — at a glance
| Amount in question | Rs 45 crore |
| Depositor | Maharashtra State Road Development Corporation (MSRDC) |
| Excess interest spread | 2.51 percentage points above carded rates |
| Resigned Chairman | Atanu Chakraborty (18 March 2026) |
| Interim Chairman | Keki Mistry (19 March 2026) |
| Norms breached | RBI Master Direction on Interest on Deposits + BR Act §29A |
Mnemonic — "MARK 29-A"
MSRDC, Audit Committee, RBI Master Direction, Keki Mistry — all converge under §29A. Whenever you see a bank “sponsorship” payment to a depositor, think §29A.
Why this matters for CLAT 2027
Expect Current Affairs MCQs on (a) the specific BR Act section, (b) RBI’s rule-making power vs SEBI’s, and (c) Audit Committee mandate under Companies Act §177. The Legal Reasoning section may also use the fact-pattern to test “negotiated returns” and fiduciary breach reasoning.
Practice Quiz — 10 CLAT-Style Questions
Click an option to reveal the answer and explanation.
