The biggest private lender in India, HDFC Bank, is under regulatory review in the United Arab Emirates due to claims that it offered ordinary investors high-risk Credit Suisse bonds, many of whom lost all of their money when the Swiss bank failed.
Clients were offered Additional Tier-1 (AT1) bonds, a complex and high-risk product, despite not meeting the financial or knowledge requirements set by the Dubai Financial Services Authority (DFSA) regulations, according to documents and legal notifications seen by Khaleej Times. Investors were left with nothing when these notes, which Credit Suisse had issued, were written down to zero in March 2023 following its emergency merger with UBS.
Only “professional clients”, typically individuals with a net worth of at least $1 million or demonstrated experience with high-risk products, are permitted to purchase AT1 bonds under DFSA regulations. However, even less well-known retail investors claim that HDFC Bank relationship managers actively targeted them and fabricated financial documents to bypass security measures. Although formal investigations have not yet been confirmed, complaints have been sent to regulators in the United Arab Emirates, Bahrain, and the Dubai International Financial Centre (DIFC).
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