The RBI has imposed a penalty of Rs 10 Crore and this action is taken due to the paucity in regulatory compliance. The validity of transactions or agreement between the bank and its customers is also questioned.
RBI sent a notice to the bank asking why they should not be penalized for violating the provisions of the act or directions formulated by RBI.
As a reply to the notice so issued, HDFC gave oral submissions on the day of the hearing and produced some documents and after looking into these documentations and clarifications offered by the bank, RBI decided upon this huge monetary penalty.
Banks executives have been forcing the loan borrowers to buy a GPS device attaching this feature mandatory to their loans offered. Loans are not getting sanctioned if the device is not purchased. Mumbai-based manufacture is making these devices for Rs.18000 per piece.
The Former CEO Aditya Puri in Annual General Meeting acknowledged the misconduct by their bank officials. He said appropriate disciplinary action has been taken against those officials.