On October 1st, HDFC Bank dismissed accusations that it didn’t report fake loan applications to the authorities after processing such customers’ fees.
“The bank categorically states once such applications are identified to be discrepant/suspicious, the bank attempts to provide an opportunity to these people to come and clarify,” the bank said in a statement.
However, in several cases, applicants fail to acknowledge, the bank said, in similar circumstances, the bank declines loan applications of such kind and updates the case in an internal database to avoid further applications from the customer.
The bank also said that the industry database is updated to help avoid borrowers from entertaining in similar practices with other banks, NBFCs & Financial Institutions. A news report emerged in Mint newspaper citing a whistleblower’s letter to the regulator claiming that HDFC Bank does not report fake loan applications to authorities and charges the processing fee in this case.
“The Bank does not waive the processing costs from customers who come forward in such discrepant/suspicious cases. The processing fee is charged towards defraying the cost of efforts of the bank for additional due diligence and verification and not for closing the cases,” the bank said.
The bank continued that charging or not charging the processing fees has no relevance to communicating to the internal & industry database or attempting to report to the authorities. In May, the Reserve Bank of India had inflicted Rs 10 crore monetary fine on HDFC Bank for infringement of particular rules.
An analysis of records in the matter of marketing and sale of third-party non-financial products to the bank’s customers, resulting from a whistleblower grievance to RBI concerning abnormalities in the auto loan responsibility of the bank, exposed infringement of the provisions above of the Act and the regulative directions, the RBI had said.