The Reserve Bank of India has imposed a penalty of Rs
10 crore on HDFC Bank for regulatory compliance lapses in the vehicle loan
portfolio. The fine has been imposed after investigating a complaint of a
whistleblower. The complaint alleged irregularities in the bank's vehicle loan
portfolio. The order for imposing the fine was issued on 27 May. In a statement
released on Friday, the Reserve Bank said that it has imposed a fine of Rs 10
crore on HDFC Bank for violation of certain provisions of the Banking
Regulation Act, 1949.
RBI in its investigation found that the rules related
to auto loans have not been followed by HDFC Bank. Issuing a notice to HDFC,
the Central Bank asked to give reasons on the entire episode. In the note, RBI
had said why penalty should not be imposed in violation of the instructions.
HDFC Bank's Auto Port Folio is accused of forcing customers to buy GPS devices
with auto loans.
RBI was also
not satisfied with the response to the notice made by the HDFC bank. Also,
during the investigation, it was clear that the rules were not followed by the
bank. And the evidence on this whole was also sufficient. After which this fine
has been imposed.
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Dr. Deepak Miglani, Email id.:- legalbuddy@gmail.com
For more legal updates follow us on twitter @deepakmiglani
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