On September 26, HDFC Bank Limited declared that the Dubai Financial Services Authority (DFSA) had formally instructed its Dubai International Financial Centre (DIFC) office to restrict the onboarding of new customers.
The DIFC branch is prohibited from approaching or doing business with new clients who have not finished the onboarding procedure by that date, according to the Decision Notice of September 25, 2025. The limitations apply to a variety of financial services operations, such as custody-related services, investment transaction structuring, credit arrangement or advice, and financial product advice.
DIFC Prohibited From Engaging Financial Promotions
DIFC is not allowed to onboard new customers or run financial promotions. Clients who have previously received financial services but were not properly onboarded may still be served, and current clients may continue to receive services.
Until the DFSA publishes a written revision or repeal, the directive, which went into force on September 26, 2025, will stay in effect. Concerns about improperly onboarded financial services for clients and problems with the branch’s onboarding procedures were the core reasons behind the move, as mentioned by the DFSA.
Response from HDFC
No major financial repercussions are anticipated because HDFC Bank indicated that the DIFC Branch business is not relevant to its overall operations or financial situation. 1,489 customers, including joint holders, had been onboarded to the branch as of September 23, 2025.
The bank declared that it has already taken the required actions to adhere to the instructions and that it is dedicated to assisting the DFSA in its current investigation as well as to promptly resolving and addressing the regulator’s concerns.
What Forced DFSA to Take Stringent Action Against HDFC?
The two-year-old scandal over the purported mis-selling of high-risk Credit Suisse additional tier-1 (AT1) bonds serves as the context for the regulatory action. Through its UAE operations, which included account booking with its Bahrain branch, relationship management by employees at its Dubai representative office, and advising from DIFC authorities, the bank was accused by investors of marketing the products.
The effective onboarding of clients in the DIFC, a jurisdiction with distinct financial regulations and a more stringent environment for “professional clients”, was investigated.
When the AT1 bonds were written down in 2023 amid Credit Suisse’s collapse, a number of non-resident Indian investors suffered significant losses and were subject to margin calls on leveraged positions.
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•The restriction took effect on September •DIFC branch cannot onboard new •Current customers will continue •Regulatory action linked to concerns |
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