HDFC Bank to refund GPS device commission to auto loan customers

The irregularities within the auto mortgage portfolio pertains to the fees that some executives of the financial institution had compelled debtors to purchase GPS units bundled with auto loans.

The nation’s largest personal sector lender, HDFC Bank, will refund the GPS machine fee to clients who had availed of such machine as a part of auto loans between FY14 and FY20. In a public discover that appeared on the newspaper on Thursday, the lender stated the refund shall be credited to the client’s checking account as registered with lender.

FE has learnt that HDFC Financial institution is refunding the quantity to clients in keeping with instructions acquired from the Reserve Financial institution of India (RBI). The whole refund quantity as GPS fee may very well be to the tune of Rs 40 crore, sources stated.

“The discover is hereby provided that HDFC Financial institution Restricted (Financial institution) shall be refunding the GPS machine fee to auto mortgage clients who availed of such machine as part of the auto mortgage funding in the course of the interval FY 2013-14 to FY 2019-20,” the lender stated within the public discover.

“The refund shall be credited to the client’s compensation checking account as registered with the financial institution. In case of any queries or in case such checking account is closed, such clients are requested to contact the financial institution from their registered e-mail ID or name on the under given toll free quantity with the small print of the auto mortgage account quantity throughout the subsequent 30 days,” the discover additional learn.

Final Month, the RBI had slapped a penalty of Rs 10 crore on HDFC Financial institution as a consequence of deficiencies in regulatory compliance within the GPS machine fee case. The regulator, nevertheless, stated the penalty was primarily based on deficiencies in regulatory compliance and was not meant to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its clients. The regulator has imposed the penalty after contemplating the financial institution’s reply to the show-cause discover.

The irregularities within the auto mortgage portfolio pertains to the fees that some executives of the financial institution had compelled debtors to purchase GPS units bundled with auto loans. The misconduct by financial institution officers was acknowledged by former MD and CEO Aditya Puri within the financial institution’s AGM when he had stated an inside probe was carried out in opposition to just a few erring staff and acceptable motion was taken.

“We had acquired some whistle-blowing complaints, inside enquiries carried out within the matter on the complaints acquired has not introduced out any conflict-of-interest concern, nor does it have any bearing on our mortgage portfolio,” Puri stated on the firm’s annual common assembly on July 18, 2020.

E mail queries despatched to HDFC Financial institution didn’t elicit any response until the time of submitting this copy.