The Dubai Financial Services Authority (DFSA) has prohibited the Dubai International Financial Centre (DIFC) branch of HDFC Bank from accepting new clients due to regulatory issues raised earlier this year.
In a statement to Khaleej Times on Saturday, the DFSA stated: “The DFSA confirms that a Decision Notice, restricting the DIFC Branch of HDFC Bank Limited from onboarding new clients, was issued on September 25, 2025.”
This directive, effective September 26, forbids the branch from soliciting, onboarding, or doing business with any new clients who had not completed the onboarding process by September 25. The restriction covers activities such as advising on financial products, arranging investment deals, arranging credit, advising on credit, and arranging custody.
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Current clients will continue to receive services, and those already offered products before the notice may still complete onboarding. The restriction will stay in place until the DFSA amends or revokes it.
On June 27, Khaleej Times reported that HDFC Bank, India’s largest private sector lender, faced scrutiny from the DFSA over allegations it sold high-risk Credit Suisse Additional Tier-1 (AT1) bonds to retail investors in the UAE, bypassing investor protection measures.
Many investors claimed their Know Your Customer (KYC) records were altered to classify them as “professional clients,” a requirement for such risky products. Some reported that their declared net worth was inflated on documents without their knowledge.
Investor reaction
Dubai resident Varun Mahajan, who claims to have lost $300,000 in the Credit Suisse bond collapse, stated the DFSA’s decision is a positive step but insufficient.
“I welcome this action, but barring HDFC from new client onboarding is minor compared to the damage already done,” Mahajan told Khaleej Times. “Over a hundred investors have lost more than $100 million. Regulators need to do more for real accountability.”
Action in India
Developments in Dubai coincide with India’s Enforcement Directorate (ED) and Economic Offences Wing (EOW) launching investigations into the bank’s practices following similar complaints there.
Notices have been issued to senior HDFC officials, including the managing director, and police complaints filed in various jurisdictions.
HDFC Bank’s response
In a filing with the Bombay Stock Exchange and National Stock Exchange of India on Friday, HDFC Bank stated its DIFC branch had 1,489 clients as of September 23. The bank mentioned that its Dubai operations were “not material” to its overall financial standing and unlikely to significantly impact its performance.
The filing also noted that the bank had “already initiated necessary steps to comply with the directives” and remains committed to collaborating with the DFSA to “promptly address and resolve concerns.”
