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Home FEATURED HDFC Bank probes lending tactics at car unit

HDFC Bank probes lending tactics at car unit

(File photograph)NEW DELHI: HDFC Bank Ltd has performed a probe into allegations of inappropriate lending procedures and conflicts of interests in its automobile-financing operation involving the unit’s previous head, in accordance to people today familiar with the subject. India’s most beneficial lender by market capitalization determined towards proceeding with an previously proposal to extend the employment of Ashok Khanna, an 18-calendar year veteran at the bank, following the investigation was concluded, claimed the persons, who requested not to be determined as the info continues to be private. The car or truck financing unit he headed had outstanding loans of extra than 1.2 trillion rupees ($16 billion) as of March 31. HDFC Bank’s management had been talking about a proposal for Khanna to remain on as the unit’s head for six months until eventually Oct, to guarantee continuity ahead of the retirement afterwards this 12 months of longstanding Taking care of Director Aditya Puri, according to the folks. Soon after the investigation, Khanna retired at the finish of March in line with his contract, they added. The end result of the investigation isn’t general public, but it adopted troubles thrown up by an inner audit of the bank’s car-dealer lending, as effectively as allegations of conflicts of interest in the obtain of world-wide positioning units for cars financed by the bank, the individuals stated, without the need of disclosing what the probe uncovered. HDFC Bank is bracing for a management change with Puri set to action down following 26 years at the helm. He will retire when he turns 70 in October less than Reserve Bank of India principles that restrict the age of top bank executives. Khanna, who was 63 at the time of leaving the bank in March, experienced been owing to action aside at the age of 60 but had been acquiring extensions considering the fact that 2017. That was because of in portion to the importance of the unit he headed, which accounts for much more than 10% of the total bank loan book. A agent of HDFC Bank confirmed there experienced been an investigation into the car-financing unit but declined to give aspects. In an emailed assertion, he reported Khanna experienced retired in March in line with the phrases of his employment contract. “The bank has a effectively-established system of investigating every single grievance that it gets and can take actions as acceptable,” the consultant stated in the electronic mail. “In the claimed occasion as nicely, the bank has adopted the thanks course of action.” Khanna declined to remark on the investigation, referring thoughts on the subject matter to the bank. He denied that any extension to his contract had been proposed, incorporating that he had retired from the bank in March as prepared.

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