Money & Banking

HDFC Bank to refund GPS device commission to auto loan customers

Our Bureau Mumbai | Updated on June 17, 2021

RBI had on May 28 imposed ₹10-crore penalty on the bank

Private sector lender HDFC Bank has said it 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 fiscal years 2013-14 to fiscal year 2019-20.

“The refund will be credited to the customer’s repayment bank account registered with the bank,” HDFC Bank said in a public notice in a newspaper on Thursday.

The bank has been in the midst of a controversy over alleged mis-selling of GPS devices to its auto loan customers.

Reserve Bank of India had on May 28 imposed a monetary penalty of ₹10 crore on HDFC Bank. This came after the central bank found irregularities based on a whistleblower complaint in the bank’s auto loan portfolio.

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 contravention of the provisions of the Act and the regulatory directions, the RBI had said.

HDFC Bank had last year conducted an internal investigation into allegations that customers of its car loans were being given GPS devices without their knowledge. The allegations had initially come up on social media.

The lender’s former Managing Director and CEO Aditya Puri at the annual general meeting on July 18 last year had confirmed that the bank conducted an inquiry into vehicle loans and appropriate action has been taken against employees involved in the misconduct.

The incident had also led to the exit of a number of executives from the bank. The cost of the device is understood to be about ₹18,000.

Published on June 17, 2021

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