UAE regulator bars HDFC Bank’s Dubai branch from onboarding new clients

New Delhi: HDFC Bank has informed that its branch in Dubai International Financial Centre, namely ‘DIFC branch’, has received a decision notice from the Dubai Financial Services Authority (DFSA), restricting it from onboarding or soliciting new clients.

Further, DIFC has also been banned from soliciting, onboarding or engaging in any financial promotions with any new client, the HDFC Bank informed in an exchange filing.

According to the notice, the DIFC branch has been prohibited from engaging in financial services for new clients, including advising on financial products, arranging deals in investments, arranging credit, and providing custody services.

The regulator highlighted concerns regarding the branch’s practices around financial services provided to customers not fully onboarded and issues linked to its onboarding process.

“The Bank has already initiated necessary steps to comply with the directives in the above-referred notice and is committed to work with the DFSA in its ongoing investigation and to promptly remediate and address the DFSA concerns at the earliest,” the filing said.

The restrictions, however, do not impact existing customers or clients who were previously offered financial services but had not yet been onboarded. The DFSA order will remain effective until it is amended or revoked in writing.

As on September 23, 2025, the DIFC Branch has 1,489 customers onboarded, including joint holders.

The regulatory action comes in the backdrop of a two-year-old controversy regarding the alleged mis-selling of high-risk Credit Suisse additional tier-1 (AT1) bonds. Investors had accused the bank of pushing the products through its UAE operations, which included advisory from DIFC officials, relationship management by staff at its Dubai representative office, and account booking with its Bahrain branch.

Investigations were done on whether clients were properly onboarded in DIFC, a jurisdiction with separate financial rules and a stricter framework for “professional clients”. Several non-resident Indian investors incurred heavy losses and faced margin calls on leveraged positions when the AT1 bonds were written down in 2023 during Credit Suisse’s collapse.

–IANS