The RBI is also seeking information on steps taken by HDFC Bank to
remedy any issues identified during the investigation, the people added, asking
not to be named.
The Reserve
Bank of India (RBI) has asked HDFC Bank to provide details of an internal
investigation into allegations of improper lending practices in its
vehicle-financing operation, according to people familiar with the matter.
The RBI is also seeking information on steps taken by HDFC Bank to remedy any
issues identified during the investigation, the people added, asking not to be
named.
A spokesman for HDFC
Bank declined to comment, saying that the lender has nothing to add to
recent remarks on the investigation by Managing Director Aditya Puri. A
spokesperson for the RBI didn’t immediately respond to an email seeking
comment.
Puri said on Saturday
that the inquiry was triggered by a whistle-blower and uncovered “personal
misconduct” by some of the bank’s employees. “Based on internal inquiry
findings, appropriate action was taken against a set of employees in the auto
loan business segment for their act of personal misconduct,” Puri said during
the investor call that followed the bank’s latest earnings report.
The vehicle
financing unit had outstanding loans of nearly Rs 1.2 trillion as of June 30,
2020. HDFC Bank is bracing for a leadership change with Puri set to step down
after 26 years at the helm.
He will retire
when he turns 70 in October under RBI rules that restrict the age of top bank
executives.
According to media
reports, HDFC Bank has fired at least six senior and mid-level officials after
an internal probe on the allegations of "improper lending practices"
and "conflict of interest". The probe found they breached the code of
conduct and governance rules and indulged in corrupt practices.
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