New Delhi, February 24: The Securities and Exchange Board of India (SEBI) on 23 February directed HDFC Bank Ltd to conduct an internal probe and strengthen its existing systems to avoid any leakage of important and confidential data. This instruction comes in the wake of recent incident where HDFC Bank’s financial earnings were disclosed on Whatsapp group related to traders. The details of 12 other banks including HDFC was leaked and doing the rounds on social media.

Sebi has also asked HDFC to find out who is behind the leak and take actions to prevent such an incident again. The market regulator mentioned that leakage of such important and confidential information can lead to insider trading and result in creation of illegitimate gains.

HDFC Bank is India’s largest private sector lender and Sebi has ordered it to inquire the leak thoroughly. The leak data contains unpublished financial reports and financial figures. According to reports it also contains data of non-performing assets (NPAs), which is sensitive data.

"Such leakage is prima facie attributable to the inadequacy of the processes/ controls/ systems that HDFC Bank as a listed company had put in place," the Securities and Exchange Board of India (Sebi) said.

As per the order, the scope of inquiry should not be limited to role of persons, including members of committees involved in generation of the original data for the purpose of determination of key figures pertaining to financial figures including gross non performing assets (GNPA).

Sebi said the purview of inquiry should also go beyond those involved in the consolidation of the figures for the financial results, preparation of board notes and presentations as well as dissemination of information relating to financial results in the public domain.

HDFC Bank has to complete the inquiry within three months and file a report to Sebi within seven days thereafter, the regulator said.

Sebi had initiated a preliminary examination in the matter of circulation of UPSI through WhatsApp groups.

During the course of preliminary examination, it was observed that in respect of HDFC Bank, the messages circulated on WhatsApp closely matched the quarterly financial results of HDFC Bank for June 2017, which were published subsequently. (With Agency Inputs)

(The above story first appeared on LatestLY on Feb 24, 2018 02:50 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).