The price of each device, manufactured by Mumbai-based Trackpoint GPS, ranges from Rs 18,000 to Rs 19,500.
HDFC Bank will refund the commision it charged for GPS devices that came with auto loans to its auto loan customers.
Eligibility
This applies to loans undertaken from 2014-20.
This costs the bank Rs 40 crore which it will credit to customers’ accounts.
For those whose HDFC accounts are closed, they have the option of contacting the bank through email or call within the next 30 days.
The price of each device, manufactured by Mumbai-based Trackpoint GPS, ranges from Rs 18,000 to Rs 19,500.
Swindling Customers To Reach Sales Targets
The decision comes in the backdrop of the discovery that some employees in the auto loans department allegedly forced customers to purchase GPS devices with their loans.
Apparently, customers were not even made aware of the fact that their loan purchase came with an extra charge levied for the device.
In some instances they were told that they would not receive the loan unless they paid for the device as well.
The affected customers came to know about it only after checking their loan documents.
The employees took to such deceitful practices in order to meet sales targets and to use the device to track borrowers in case they defaulted.
After the incident, a probe was ordered and consequently the bank fired 6 senior and mid-level employees.
They were charged with having conducted transactions that were “corrupt and violative of the code of conduct and governance standards of the bank”.
RBI Gets Involved
The RBI had earlier fined HDFC Bank Rs 10 crore for inconsistencies in its auto loan book and for deficiencies with regards to compliance.
The regulator made the decision after it received a tip-off from a whistleblower.
It then proceeded to conduct an investigation into the bank’s practice of selling 3rd party non-financial products to its auto loan customers.
They were then accused of contraventing regulatory directions.
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