HDFC Bank shares fell nearly 2% on Wednesday following a media report alleging that the bank made improper payments to a Maharashtra government agency to attract deposits.

At around 1:38 PM, the bank’s shares were trading at Rs.760.70 on the NSE, down 2.34% from the previous close.

According to a Reuters report citing documents and sources, the bank allegedly paid around Rs.45 crore to the Maharashtra State Road Development Corporation (MSRDC) in order to secure large deposits. The report claimed that the payments were routed as marketing expenses, despite banking regulations prohibiting lenders from offering differential benefits for deposits.

The report further alleged that the transactions were carried out to incentivise the state agency to maintain deposits with the bank and stated that CEO Sashidhar Jagdishan was allegedly aware of the arrangements.

Responding to the allegations, HDFC Bank denied any wrongdoing and said the bank follows robust internal compliance and control mechanisms.

“All issues are dealt with in accordance with established norms, and full process is always followed before final determination post any internal review.”

The bank also stated that it strongly rejected any assumptions of misconduct based on selective material.

The latest development comes amid continued scrutiny over governance concerns at the lender. HDFC Bank shares have declined around 9.5% since March 19, when former part-time chairman Atanu Chakraborty resigned unexpectedly.

Although Chakraborty did not level direct allegations at the time of stepping down, he had reportedly stated that certain practices within the bank were not aligned with his personal ethics and values.

Reuters had earlier reported that legal firms appointed by the bank to review the allegations had not identified any material procedural lapses so far, though the review process is still ongoing.

The bank is also yet to approach the Reserve Bank of India for the reappointment of Jagdishan, whose present three-year term as CEO is scheduled to conclude in October.