HDFC Bank to refund GPS device commission to auto loan customers

1 month ago 27
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“The notice is hereby given that HDFC Bank Limited (Bank) will be refunding the GPS device commission to auto loan customers who availed of such device as a part of the auto loan funding during the period FY 2013-14 to FY 2019-20,” the lender said in the public notice.

The irregularities in the auto loan portfolio pertains to the charges that some executives of the bank had forced borrowers to buy GPS devices bundled with auto loans.The irregularities in the auto loan portfolio pertains to the charges that some executives of the bank had forced borrowers to buy GPS devices bundled with auto loans.

The country’s largest private sector lender, HDFC Bank, will refund the GPS device commission to customers who had availed of such device as part of auto loans between FY14 and FY20. In a public notice that appeared on the newspaper on Thursday, the lender said the refund will be credited to the customer’s bank account as registered with lender.

FE has learnt that HDFC Bank is refunding the amount to customers according to directions received from the Reserve Bank of India (RBI). The total refund amount as GPS commission could be to the tune of Rs 40 crore, sources said.

“The notice is hereby given that HDFC Bank Limited (Bank) will be refunding the GPS device commission to auto loan customers who availed of such device as a part of the auto loan funding during the period FY 2013-14 to FY 2019-20,” the lender said in the public notice.

“The refund will be credited to the customer’s repayment bank account as registered with the bank. In case of any queries or in case such bank account is closed, such customers are requested to contact the bank from their registered email ID or call on the below given toll free number with the details of the auto loan account number within the next 30 days,” the notice further read.

Last Month, the RBI had slapped a penalty of Rs 10 crore on HDFC Bank due to deficiencies in regulatory compliance in the GPS device commission case. The regulator, however, said the penalty was based on deficiencies in regulatory compliance and was not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. The regulator has imposed the penalty after considering the bank’s reply to the show-cause notice.

The irregularities in the auto loan portfolio pertains to the charges that some executives of the bank had forced borrowers to buy GPS devices bundled with auto loans. The misconduct by bank officials was acknowledged by former MD and CEO Aditya Puri in the bank’s AGM when he had said an internal probe was conducted against a few erring employees and appropriate action was taken.

“We had received some whistle-blowing complaints, internal enquiries carried out in the matter on the complaints received has not brought out any conflict-of-interest issue, nor does it have any bearing on our loan portfolio,” Puri said at the company’s annual general meeting on July 18, 2020.

Email queries sent to HDFC Bank did not elicit any response till the time of filing this copy.

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