HDFC Bank fined Rs 10 crore by RBI in car loan case.
MUMBAI: The Reserve Bank of India (RBI) has imposed a Rs 10 crore penalty on HDFC Bank for wrongfully selling third-party non financial products to its auto loan customers.
It may be recalled that last year, following a whistleblower complaint, HDFC Bank had sacked six employees. The bank was accused of forcing borrowers to purchase a GPS device from a specified provider. Ashok Khanna, head of the bank’s auto loan business had stepped down in the wake of the scandal.
“An examination of documents in the matter of marketing and sale of third-party non financial products to the bank’s customers, arising from a whistleblower complaint to RBI regarding irregularities in the auto loan portfolio of the bank, revealed, inter alia, contravention of the aforesaid provisions of the Act and the regulatory directions”, RBI said in a statement announcing he fine. An HDFC Bank spokesperson said that the bank was in receipt of RBI’s letter and would abide by it.
RBI said that after considering the lender’s reply to the show-cause notice, and oral submissions made during the personal hearing it concluded that the allegations were substantiated and warranted imposition of monetary penalty