HDFC Bank on Thursday announced the refund of the controversial “GPS device commission” charged to auto loan borrowers for six years.
Aditya Puri, then the bank’s chief executive, had admitted irregularities in car loan disbursements by his team last year after specific allegations surfaced online. The bank was also fined Rs 10 crore by the RBI for the failures earlier this year.
The city-headquartered lender announced the repayment in a public notice published in newspapers.
“HDFC Bank will refund the commission of the GPS device to car loan customers who availed this device as part of the car loan financing during the period of FY 2013-14 to FY 2019-20” , says the notice.
He added that the refund will be credited to the customer’s refund bank account registered with the bank and asked customers to contact him within the next 30 days.
It has been alleged that the car loan borrowers were forced to purchase the GPS (global positioning system) device from the bank at a cost of over Rs 18,000 per piece that came with the loan.
As well as being in violation of existing rules, which prohibit lenders from selling other products, it also raised questions about privacy, as a vehicle could be tracked by such a device.
A few heads have also rolled in the bank since the irregularities were revealed in the practice of car loans, now under another heading.
On May 29, the RBI had fined HDFC Bank Rs 10 crore for selling the vehicle tracking devices, after reviewing its response to a show cause notice, oral submissions made during the personal hearing and the review of other clarifications/documents provided by the lender.