RBI imposes rupee 10 crore penalty on HDFC bank for car loan portfolio
The Reserve Bank has imposed a penalty of Rs 10 crore on HDFC Bank for regulatory compliance failures regarding its auto loan portfolio. The sanction came after reviewing a whistleblower complaint about irregularities in the lender’s auto loan portfolio. The order imposing the fine was issued on May 27. In a statement issued on Friday, the Reserve Bank of India (RBI) said it had fined HDFC Bank 10 crore rupees for violating certain provisions of the Banking Regulation Act, 1949.
Apex Bank said a review of documents relating to the marketing and sale of third-party non-financial products to the bank’s customers, resulting from a whistleblower complaint it received about irregularities in the wallet auto loan from the bank, revealed a violation of the provisions of the Act and regulatory guidance. On a related note, RBI said a notice was sent to the bank warning it to justify the reasons why a penalty should not be imposed for the tickets.
After reviewing the bank’s response to the show cause notice, oral submissions made during the personal hearing, and reviewing additional clarifications / documents provided by the bank, RBI came to the conclusion that the contraventions were ” justified and justified the imposition of a financial penalty, ”the statement says.
RBI has also made it clear that the action is based on gaps in regulatory compliance and is not intended to rule on the validity of any transaction or agreement HDFC Bank has entered into with its clients.