India’s largest private bank HDFC Bank has initiated a probe into its auto lending business after allegations were made against Ashok Khanna, who was the head of the bank’s secured vehicle loans business before he retired on March 31, 2020. As per reports, Khanna who has been working with bank for 18 years, was denied an extension.
HDFC Bank said on Tuesday that these allegations wouldn’t have an impact on its loan book, nor cause a loss to the bank.
"It is... important to clarify here that this matter is not related in any manner whatsoever to the lending aspect of the business. Therefore, there's no question of this having any bearing on ''loan book'' or causing any loss to the bank," a bank spokesperson said.
The allegations pertained largely to the professional conduct which raised issues about possible conflicts of interest, sources told PTI.
The spokesperson reiterated that the Bank has a robust policy and process to deal with complaints and allegations and take action as appropriate.
"The process and the outcome of dealing with such complaints is an internal matter of the Bank where we are required to be guided by our policy on disclosure. Suffice to say that as a Bank, we've always upheld the highest standards of governance and propriety at all times and will continue to do so," the statement added.
Speaking of Khanna’s retirement, the bank said that he was on an extension of service and retired on March 31, 2020 in the normal course of his employment.
“The bank has a well-established process of investigating every complaint that it receives and takes actions as appropriate," an HDFC Bank spokesperson said.
The auto loan book had stood at Rs 83,935 crore as of March 31, 2020, constituting less than a fifth of the overall retail book. The auto loans had grown by only 4.04 per cent in FY20 as against the 14.61 per cent growth in the overall retail advances. It can be noted that auto sales were also in the slow lane for much of the year.
Meanwhile, Munish Mittal, the bank's chief information officer has decided to move on to pursue higher studies at an overseas university, sources said.
Mittal had joined the lender way back in 1996 and had been serving as the CIO since 2015, they said.
HDFC Bank shares closed 2.26 per cent down at Rs 1,080.40 apiece on BSE on Monday against gains of 0.27 per cent on the benchmark index Sensex.