UBS(US:UBS) BusinessLine·2025-10-28 08:50Core Viewpoint - HDFC Bank Ltd. is facing scrutiny over allegations of mis-selling Credit Suisse securities, leading to the placement of two senior executives on gardening leave as an internal investigation is underway [1][4]. Group 1: Allegations and Internal Actions - The bank has placed two senior executives on gardening leave amid a probe related to the alleged mis-selling of Credit Suisse's Additional Tier-1 (AT1) bonds [1]. - HDFC Bank has stated that it has not encountered any instances of mis-selling regarding the AT1 bonds, despite customer claims of inadequate information about the bonds' high-risk nature [2][3]. - An internal investigation is ongoing to determine who authorized the sale of the bonds, with potential punitive actions expected once accountability is established [4]. Group 2: Regulatory Context and Implications - A Dubai regulator flagged lapses in HDFC Bank's processes for offering financial services, resulting in a ban on adding new customers at its Dubai branch, which may have influenced the decision to place the bankers on leave [5][6]. - AT1 instruments are designed to shift the burden of bank rescues onto bondholders, making them attractive yet risky investments. In India, these bonds cannot be sold to retail investors, with exceptions for professional investors with over $1 million in investable assets [7].