HDFC Bank may have bundled GPS with loans
MUMBAI: Car loan customers of HDFC Bank Ltd were forced to purchase a vehicle tracking device for about four years ended December 2019 in a possible breach of guidelines prohibiting banks from non-financial businesses, two people aware of the matter said. The bank on Saturday said it has taken action against employees in the vehicle finance unit after an investigation, without giving details.
HDFC Bank executives pushed auto loan customers to buy GPS devices costing ₹18,000-19,500 from 2015 to December 2019, according to the two people cited above, who spoke on condition of anonymity. The cost of the device was added to the loan amount.
“These devices were bundled along with the loan, where reluctant applicants were told that unless they agreed to take this product, their loan would not be sanctioned,” the first of the two people said, adding senior executives at the auto loan unit were under extreme pressure to meet sales targets for these devices.
The device in question was sold by Trackpoint GPS, a Mumbai-based firm. Data from the registrar of companies (ROC) shows the company’s revenue jumped 175 times between FY15 and FY19. It posted a loss of ₹3.87 crore in FY19 on the back of ₹78.31 crore revenues, with expenses overshooting revenues. Trackpoint’s total expenses stood at ₹80.25 crore in FY19, including components such as commission and brokerage of ₹3.49 crore, and legal and professional fees of ₹2.84 crore. Directors of Trackpoint include Amar V. Amin, Carey Bryan Fan and Vinod Ranchhodbhai Amin. California-based Matchpoint GPS Inc. is an investor in the company.
A former employee of Trackpoint told Mint on condition of anonymity that the company’s sales executives were told to meet HDFC Bank officials frequently, and arrive at sales targets for these devices. “It was like a tie-up where the bank provided loan customers to us and we provided the devices,” said the person cited above.