Dubai Authority Bars HDFC Bank's DIFC Branch From Taking New Clients

The Dubai Financial Services Authority (DFSA) has barred HDFC Bank's Dubai International Financial Centre (DIFC) branch from onboarding new clients, following regulatory concerns flagged earlier this year.

In a statement to Khaleej Times on Saturday, the DFSA confirmed: "The DFSA confirms that a Decision Notice, restricting the DIFC Branch of HDFC Bank Limited from the onboarding of new clients, was issued on September 25, 2025.”

The directive, effective September 26, prohibits the branch from soliciting, onboarding, or conducting business with any new clients who had not completed the onboarding process as of September 25. The restriction applies across activities such as advising on financial products, arranging deals in investments, arranging credit, advising on credit, and arranging custody.

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Existing clients will continue to be serviced, and those who had already been offered products prior to the notice may still complete onboarding. The restriction will remain in force until explicitly amended or revoked by the DFSA.

On June 27, Khaleej Times reported that HDFC Bank, India's largest private sector lender, had come under the DFSA's lens amid allegations it sold high-risk Credit Suisse Additional Tier-1 (AT1) bonds to retail investors in the UAE, bypassing investor-protection safeguards.

Multiple investors alleged that their Know Your Customer (KYC) records were manipulated to classify them as“professional clients,” a requirement for such risky products. Some said their declared net worth was inflated on documents without their knowledge.

Dubai resident Varun Mahajan, who says he lost $300,000 in the Credit Suisse bond wipeout, said the DFSA's decision was a step in the right direction but not enough.

“I welcome this action, but barring HDFC from onboarding new clients is negligible compared to the damage already done,” Mahajan told Khaleej Times.“Over a hundred investors have lost more than $100 million in life savings. Regulators need to go further if there is to be real accountability.

The developments in Dubai come even as India's Enforcement Directorate (ED) and Economic Offences Wing (EOW) have launched probes into the bank's practices after similar complaints surfaced there.

Notices have been issued to senior HDFC officials , including the managing director, and police complaints have been filed in multiple jurisdictions

In a filing with the Bombay Stock Exchange and National Stock Exchange of India on Friday, HDFC Bank said its DIFC branch had 1,489 customers onboarded as of September 23. The bank noted that the Dubai operations were“not material” to its overall financial position and therefore unlikely to have any significant impact on its performance .

The filing added that the bank had“already initiated necessary steps to comply with the directives” and remained committed to working with the DFSA to“promptly remediate and address concerns”.

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