We present here an analysis of a set of measurements of water surface elevations (waves), cross-shore currents, and longshore currents from two cross-shore locations (at 50 and 200 m offshore) in the nearshore zone off Kerala, India, to understand the hydrodynamics in a mud bank regime. The measurements were made over a period of approximately one year to detect the differences in the nearshore hydrodynamic regime (i.e., wave and current characteristics) between events of wind and wave activity during the nonmonsoon and monsoon seasons. A comparison of the data from the nonmonsoon season (when the water column was relatively free of suspended sediment load) and the monsoon season (when large suspended sediment load was present) showed significant differences in the hydrodynamic characteristics. During the nonmonsoon season, progressive edge waves in the infragravity frequency band with weak reflections were observed, while during the monsoon season, the presence of far infragravity waves, infragravity waves (leaky modes and trapped edge wave modes) coupled with strong shoreline reflections, and an undertow were observed. The nonlinear wave–wave interactions were noticed to be more pronounced in the upper water column, progressively diminishing vertically down toward the seabed and horizontally toward the shore. Based on the field observations and analysis, we present a plausible explanation for the formation, sustenance, and contraction of the mud bank.