HDFC Bank will reimburse the commision it charged for GPS devices that came with auto loans to its auto loan customers.
For loans taken out from 2014 to 2020, this applies.
This costs the bank Rs 40 crore, which is credited to customers’ accounts.
For customers whose HDFC accounts are closed, they can email or call the bank within 30 days.
Each device, manufactured by Mumbai-based Trackpoint GPS, costs between Rs 18,000 and Rs 19,500.
Swindling Customers To Reach Sales Targets
Some employees in the auto loans department have been accused of forcing customers to purchase GPS devices as part of their loans, prompting the decision. Evidently, no correspondence was sent to the customers informing them that they would be charged an extra fee for the loan device.
Sometimes, the customers were told they would not receive their loans unless they also bought the device. It wasn’t until the affected customers checked their loan documents that they learned about it.
Such practices were used to meet sales targets and to track borrowers in case they defaulted.
In response to the incident, a probe was ordered, and six senior and mid-level bank employees were fired. Their transactions were said to have been “corrupt and in violation of the rules and regulations of the bank”.
RBI Gets Involved
HDFC Bank was previously fined Rs 10 crore for inconsistencies in its auto loan book and for violations of compliance.
A whistleblower alerted the regulator to the situation, which led to the decision. An investigation of the bank’s practice of selling customers non-financial products by third parties then followed.