HDFC Bank has been barred from onboarding new customers at its Dubai International Financial Centre (DIFC) branch by the local regulator amid probe.

Dubai Financial Services Authority (DFSA) has pointed out alleged violations pertaining to financial services offered by the DIFC branch to customers. 

Raising regulatory concerns, it has restricted the branch from soliciting or conducting business with new clients, effective 26 September.

The restriction covers activities such as advising on financial products, arranging deals in investments, arranging credit, advising on credit, and arranging custody.

HDFC Bank, however, can continue to service its existing customers. It can also complete onboarding of clients who had already been offered products prior to the notice. 

The restriction will remain in force until amended or revoked in writing by the DFSA.

HDFC Bank has initiated steps to comply with the directives in the notice. “We are committed to working with the DFSA to promptly remediate and address DFSA concerns at the earliest," the lender stated.

The country’s largest private sector lender also said that it does not see any material impact from it to the bank’s overall operations or financial position.

As of 23 September, the DIFC branch has 1,489 customers onboarded, including joint account holders.

HDFC Bank opened its branch at DIFC, a purpose-built financial free zone in Dubai, on 4 August 2014, to provide wealth management services to the Indian diaspora in the UAE. It was the lender’s third overseas branch, after Bahrain and Hong Kong.