More than 75 Carlisle investors plan to approach the Prime Minister's Office (PMO) this week, alleging that HDFC Bank's Dubai operations mis-sold them a life settlement product. The investors collectively represent over $13.5 million in principal investment in Carlisle's Luxembourg Life Fund and claim significant losses and prolonged denial of redemption.They are also exploring legal action against HDFC Bank over alleged lapses in product suitability and disclosures.[businessworld+6]
Fund Marketing Under Scrutiny
The dispute centers on Carlisle's life settlement product, which investors bought through HDFC Bank's UAE and Bahrain operations between 2017 and 2019.Investors allege the bank presented the product as a capital-protection or insurance-linked investment.They were reportedly told it offered attractive historical returns of around 12-19 percent a year.[businessworld+7]
Hitesh Bhatia, a Dubai-based former banker and investor in the fund, stated that the group will highlight "serious client-suitability lapses at HDFC Bank in Dubai."He also cited concerns about leverage, disclosures, investor losses, and denial of liquidity.Investors claim that leverage, sometimes three to five times their deposits, increased their exposure and amplified losses during the Covid-19 market disruption.[businesstoday+6]
Wider Regulatory Engagement Planned
Beyond the PMO, the investor group intends to approach several other regulatory bodies. They plan to file complaints with the Reserve Bank of India (RBI) and the Central Bank of Bahrain.Some investors have already independently contacted the Dubai Financial Services Authority (DFSA).Redemptions for the fund have reportedly been suspended since late 2020.[businessworld+7]
ICICI Direct Research noted that a group of about 70 investors had raised complaints involving approximately $12.5 million.The overall amount allegedly mobilized from HDFC Bank customers for this product is estimated at around $100 million.HDFC Bank has denied any mis-selling, according to the ICICI Direct note.[businessworld+3]
Previous Regulatory Actions
This is not the first time HDFC Bank's overseas operations have faced regulatory scrutiny. In 2025, the DFSA restricted HDFC Bank's DIFC branch from onboarding new clients.This action followed regulatory concerns over the alleged mis-selling of high-risk Credit Suisse AT1 bonds to retail customers.The current dispute could add to scrutiny of the bank's product suitability and oversight of investment products distributed through its foreign branches.[businessworld+6]
The investors are consolidating their complaints and exploring legal avenues.They have also given HDFC Bank until August 31 to respond to their concerns.This move signals a significant escalation in the ongoing dispute between the investors and HDFC Bank.[businessworld+4]
