InvestorQ : Why is HDFC Bank looking closely into lending practices of its vehicle financing unit?
Priyanka N made post

Why is HDFC Bank looking closely into lending practices of its vehicle financing unit?

Answer
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NISHA Nayak answered.
3 months ago


HDFC Bank is currently investigating into allegations of improper lending practices and conflicts of interests in its vehicle-financing operations. While nothing has been confirmed, the bank it doing its own internal due diligence. HDFC Bank has outstanding vehicle loans of Rs.120,000 crore as of FY20 and so it is a significant 10% business for HDFC Bank.

The investigation was an outcome of issues thrown up by internal audit of the vehicle-dealer lending. There were allegations of conflicts of interest in the purchase of GPS for vehicles financed by the bank. HDFC Bank has been known for its tight controls and cross checking mechanisms, which have helped keep gross NPAs at among the lowest among banks.