A group of more than 75 investors who purchased Carlisle's life settlement product through HDFC Bank's Dubai operations are planning to write to the Prime Minister's Office this week, according to reports from The Economic Times. The group represents more than $13.5 million in principal investment in Carlisle's Luxembourg Life Fund and is consolidating complaints while exploring legal action against HDFC Bank. As reported by The Economic Times, the investors allege mis-selling, substantial losses, and years-long denial of redemption from the insurance-linked product. Hitesh Bhatia, a Dubai-based former banker who invested in the fund in 2019, told The Economic Times that the group plans to "write to the PMO this week, highlighting the serious client-suitability lapses at HDFC Bank in Dubai, concerns around leverage, disclosures, investor losses, and denial of liquidity."
The investor group plans to approach multiple regulatory authorities beyond the PMO, as reported by The Economic Times. They intend to contact the Reserve Bank of India, file a complaint with the Central Bank of Bahrain, and hire a lawyer to take up the matter with the Dubai Financial Services Authority (DFSA). According to The Economic Times, Bhatia confirmed that the group also plans to approach the RBI and file a complaint with the Central Bank of Bahrain, with some investors having already independently complained to the DFSA. The DFSA serves as the independent regulator of all financial services conducted through the Dubai International Financial Centre, a federal financial freezone in Dubai.
The investors allege that the Carlisle-linked product was marketed as a capital protection investment with past returns of 12-19% annually, as reported by The Economic Times. However, they claim that leverage offered alongside the investment significantly increased their exposure and losses during the Covid-19 market crash. According to The Economic Times, one investor alleged that the Carlisle-linked product was presented as a capital-protection, insurance-linked investment that had delivered annual returns of 12-19 per cent in the past. The fund, run by Carlisle Management Company, a Luxembourg-based firm, buys life-insurance policies from older Americans who no longer need them, pays the premiums, and collects the death benefit when the policyholder dies. The returns are this payout, minus what it paid to buy the policy from the original policyholder, plus the premiums. While this would be impossible under Indian insurance regulations, the fund has been frozen since late 2020 with terms restructured and fees continuing to be charged.
The move comes in the backdrop of DFSA's action against HDFC Bank's DIFC branch in 2025, over alleged mis-selling of high-risk Credit Suisse AT1 bonds to retail customers, as reported by The Economic Times. According to The Economic Times, when it restricted the branch from onboarding new clients and conducting specified financial-services activities with them, following regulatory concerns. The investor cited above shared correspondence and records with The Economic Times, alleging that HDFC Bank offered leverage of three to five times the amount of deposits blocked with the bank for investment in the products. Bhatia told The Economic Times that the group has "written a letter to the HDFC Bank and given them time till August 31 to respond. In case they do not respond, we will go for the legal recourse."
