Mumbai, July 28 -- HDFC Bank's board on Monday issued warning letters and levied a Rs.1 lakh penalty on three top officials of the bank, after announcing the completion of an internal review for the Maharashtra State Road Development Corporation (MSRDC) issue. These officials include managing director and chief executive officer Sashidhar Jagdishan, chief financial officer Srinivasan Vaidyanathan, and Arvind Vohra, group head for retail assets. In a filing with the exchanges, the bank said it has also issued warning letters to other employees involved in the case. The matter pertains to the bank's arrangement with MSRDC for garnering deposits in 2017 and 2021, as reported by Indian Express on 27 May. The report alleged that HDFC Bank made payments of Rs.45 crore to MSRDC-routed as marketing expenses-to effectively offer higher returns on its deposits with the bank. The newspaper report had also claimed that internal records reviewed during the probe pointed to discussions involving senior management, including Jagdishan. The payments were allegedly structured as 'differential interest' linked to deposits from MSRDC, but were routed through the bank's marketing department and shown as contributions towards a road safety awareness campaign involving local vendors, instead of being directly booked as interest payouts. In a meeting on 23 July, the board concluded that the conduct of the employees involved constituted "business overreach" rather than any mala fide action, personal enrichment, or improper motive. However, keeping in view "any potential divergence with the applicable RBI Directions and based on the recommendations of the Special Disciplinary Committee of Independent Directors", it decided to issue warning letters and monetary penalty. When the issue first came to light, HDFC Bank had said that it has robust internal oversight, audit and control processes and systems, and that full process is always followed before final determination post any internal review....