The accusations levelled against the HDFC Bank’s vehicle finance unit have now caught media and Reserve Bank of India’s (RBI) attention. The accusation levelled against the HDFC Bank’s vehicle finance unit includes ‘improper lending practice’. RBI has now sought details of the internal investigation conducted by the bank. RBI further sought details of how HDFC dealt with issues that arose during the internal investigation.

During this investigation, HDFC has fired over 6 senior officials and more than 8 lower officials. According to HDFC officials, a few of its employees of vehicle finance loan unit had breached code of conduct and governance rules on numerous occasions and were frequently indulging in corrupt practices.

Aditya Puri, the MD of HDFC, had stated earlier that this personal misconduct was brought to the notice of the officials by a whistle-blower. Post which, an internal investigation was set up and upon the findings of the investigative team, appropriate action was taken by the bank.

According to the findings of the report, the officials involved in the malpractice were selling GPS devices with vehicular loans to achieve the required sales target over spa of 4 years from 2015 to 2019. The GPS device was also allegedly used to track the customer in case the loan was defaulted. The GPS device costed around Rs. 19,000/- per piece. Bank in partnership with Trackpoint GPS was offering their customers these devices but these corrupt officials sold it to the customers without asking them if they wanted it or not and did not register these sales of the devices with the bank.

Stricter actions could have been taken against these officials like a complaint or an FIR against these officials for their criminal offences but the bank has been lenient on them and only sacked them. RBI’s intervention could reveal a few details which could provide further information or clarity of what actually went down. RBI could also take a stricter action either against the bank for duping its customers or against the officials involved by lodging a criminal complaint against them. Even though the latter seems far-fetched, it could be a measure taken by the apex bank to provide the customers some justice.