The Reserve Bank of India 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 as the information is not public.
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 did not immediately respond to an e-mail 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-lakh crore ($16 billion) as of June 30.
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.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.