HDFC Bank May Have Paired GPS Device With Car Loan – The New Indian Express
NEW DELHI: In a possible violation of regulatory guidelines, HDFC bank borrowers were forced to take GPS devices with the purchase of a car for about four years until December 2019, sources said.
According to sources, the executives of the country’s largest private sector lender forced vehicle loan clients to purchase Global Positioning System (GPS) devices costing Rs 18,000-20,000 between 2015 and 2019.
Apparently, these GPS devices were of a particular mark indicating a conflict of interest and a violation of regulatory standards.
On this issue, a spokesperson for HDFC Bank said: “As you know, we said (Mr Puri’s address to the AGM) what we need to do in this matter. there is nothing more to add. HDFC Bank Managing Director and CEO Aditya Puri said on Saturday while addressing shareholders at the annual general meeting, he said “disciplinary action “had been taken against a few employees in the auto loan sector for showing” personal fault “.
Puri has denied the existence of a “conflict of interest” uncovered by an investigation launched following complaints from whistleblowers.
“The investigation brought to light another aspect related to personal misconduct exhibited by a range of individuals for whom appropriate disciplinary action has been taken,” Puri said.
There are allegations that GPS devices were bundled with the loan and those who refused to take it were generally denied a loan penalty.
The Banking Regulation Act, 1949, stipulates certain activities in which a bank can engage, apart from its role of lender. These have been defined in 15 general sub-categories and the law clearly states that “no banking company shall engage in any form of activity other than those referred to in subsection (1)”.
A former group leader of secured vehicle loans was denied an extension after receiving two extensions after retirement in March. Auto loans accounted for one-fifth of the bank’s personal loans and one-tenth of its overall assets.
Outstanding auto loans were reduced to Rs 81,082 crore in June 2020, from Rs 83,935 crore in March and Rs 81,913 crore in the period last year. It can be noted that auto sales also slowed down for much of the year.