RBI Directs HDFC Bank To Refund GPS Device Commission Mis-sold to Auto Loan Customers
MAS Team | 19 June 2021
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In a remarkably tough action rarely seen from regulatory authorities in India, HDFC Bank Ltd has been asked to refund commission it earned from GPS devices to customer who had taken auto loan. In a public notice, HDFC Bank announced that the bank will be refunding GPS device commission to auto loan customers, whoever has availed such device as a part of auto loan funding during FY13-14 to FY19-20.
"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 18002102678 with the details of auto loan account within next 30 days," HDFC Bank said in the public notice.
HDFC Bank added that the refund will be credited to the customer's repayment bank account as registered with the bank and asked customers to get in touch with it in the next 30 days.
The bank's then chief executive Aditya Puri had last year admitted to irregularities in the auto loan disbursements by its team after specific allegations surfaced online. It was alleged that the auto loan borrowers were forced to purchase the GPS (global positioning system) device from the bank at a cost of over Rs 18,000 per piece bundled with the loan.
The bank was also slapped with a penalty of Rs 10 crore by the banking regulator for selling the vehicle tracking devices on 29 May 2021.
In a statement, the Reserve Bank of India (RBI) had said, "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 whistle blower complaint to RBI regarding irregularities in the auto loan portfolio of the bank, revealed, inter alia, contravention of the afore-said provisions of the Act and the regulatory directions."
Apart from being in contravention of existing rules, which prohibit lenders from selling any other products, it also posed questions around privacy as a vehicle could be tracked by such a device.
A few heads have also rolled at the bank since the irregularities came to light in the auto loans division, which is now under a different head.
Dear Investor,
In case of any grievance / complaint :
In case of any grievance / complaint :
- Please contact Compliance Officer Pankaj Raheja at [email protected] and Phone No. - 91-22-35131664.
- You may also approach CEO Debashis Basu at email- id [email protected] and Phone No. - 91-22-35131664.
