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HDFC Bank has placed two senior executives on gardening leave after the Dubai Financial Services Authority (DFSA) restricted the bank’s DIFC branch from onboarding new clients. The decision follows ongoing scrutiny over how Credit Suisse AT1 bonds were sold to UAE-based investors.
According to Bloomberg, the two executives were involved in trades linked to Credit Suisse’s AT1 instruments, which were written down to zero during the bank’s 2023 rescue merger with UBS, wiping out billions in investor wealth worldwide — including in the UAE.
An HDFC Bank spokesperson told Bloomberg the bank “has not come across any instances of mis-selling till now”, but declined to comment on the internal action.
DFSA Investigation and Client Complaints
The DFSA’s action in September 2025 cited systemic lapses in documentation and client classification at the HDFC DIFC branch. Several UAE investors had earlier alleged that their Know Your Customer (KYC) profiles were manipulated to reclassify them as professional clients, a designation required for high-risk investment products.
Among the affected investors was Dubai resident Varun Mahajan, who claims to have lost $300,000 on Credit Suisse AT1 bonds. Documents reviewed by Khaleej Times reportedly confirm discrepancies between his declared and altered net worth. Another investor, based in the Philippines, alleged that a leverage loan was opened in his name without consent and that his profile was adjusted to show higher risk tolerance.
The bank’s internal investigation, currently in its final phase, is expected to determine which supervisors authorized the disputed bond sales. Meanwhile, parallel probes are being conducted in India by the Enforcement Directorate (ED) and Economic Offences Wing (EOW).
What Are AT1 Bonds?
Additional Tier 1 (AT1) bonds are high-yield, high-risk instruments that can be fully written off in a financial crisis. Many retail investors claim they were not informed of the potential for total loss. The collapse of Credit Suisse’s AT1 bonds in 2023 remains one of the most significant financial debacles in recent years.
