Excerpt from The Free Press Journal Article, Published on Dec 17, 2024.
HDFC Bank, India’s largest private-sector bank, has come under scrutiny once again, facing a second warning in a week from the Securities and Exchange Board of India (SEBI) for alleged regulatory non-compliance. The warning, issued on Monday, pertains to a delay in the bank’s disclosure of senior employee Arvind Kapil’s resignation, which was not reported to the stock exchanges within the stipulated time frame.
According to SEBI’s regulations on Listing Obligations and Disclosure Requirements (LODR), listed entities must inform the exchanges about any changes within the company, including resignations, within 12 hours. However, HDFC Bank delayed the disclosure of Kapil’s resignation by three days, without providing any explanation for the delay. This violation of the disclosure norms has raised concerns, prompting SEBI to issue a formal administrative warning.
This warning marks the second such action by the market regulator within a week. Earlier, SEBI had reprimanded HDFC Bank for non-compliance with various other regulations, including those concerning merchant bankers, capital issuance, and insider trading. The watchdog stressed that these violations were serious and instructed the bank to exercise caution in the future to avoid similar issues. It further directed the bank to present a response to the Board and disclose it to the exchanges.
HDFC Bank had notified the resignation of Arvind Kapil on April 30, 2024, after the three-day delay, and also appointed Sumant Rampal as the Group Head of Mortgage Business on March 28, 2024, without adhering to the necessary regulatory filings.
The market regulator’s warning emphasizes the importance of strict compliance with disclosure rules and the need for listed companies to maintain transparency. With the second warning now in place, HDFC Bank faces increased pressure to ensure that it adheres to all regulatory provisions going forward, or face potential enforcement actions.
To delve deeper into this topic, please read the full article The Free Press Journal.
