Image credit: twitter.com/RBI, twitter.com/HDFCBank_Cares
A fine of Rs 10 crore has been imposed on HDFC Bank by the banking regulator, Reserve Bank of India. HDFC has been found guilty of forcibly selling third party non-financial products to its vehicular loan customers. Last year, HDFC had terminated six of its employees after a whistleblower complained to the RBI.
The bank, last year, was accused of forcing its vehicular loan customers to purchase a GPS device from a particular supplier. Following the controversy, Ashok Khanna, the then head of HDFC’s auto loan business had to resign. Taking cognizance of the complaint, the RBI sent a show-cause notice to the bank. The regulator also examined the documents related to HDFC’s auto business, marketing and the sale of third-party non-financial products. The probe, according to a statement released by RBI, revealed,” inter alia, contravention of the aforesaid provisions of the Act and the regulatory directions”. After examining the reply received from the lender to its show-cause notice and oral submissions made in a hearing the central bank found HDFC guilty and announced that it was slapping a fine of Rs 10 crore on the bank.
A spokesperson for the HDFC Bank confirmed that they had received a letter from RBI and said that will follow the orders of the regulator.