Home/ Industry / Banking/  Misconduct did not hit bank’s loan book: HDFC Bank MD AdityaPuri

MUMBAI : An internal probe by HDFC Bank Ltd into its vehicle lending business has revealed issues of personal misconduct and appropriate disciplinary action has been taken against a section of employees, managing director Aditya Puri said on Saturday.

Puri, whose tenure ends in October, was speaking to analysts to discuss the June quarter results of India’s largest private lender. Prior to the analyst call, Puri addressed the bank’s shareholders at its FY20 annual general meeting (AGM) where he made similar comments about the probe.

“We had received some whistle-blowing complaints. Internal enquiries carried out in the matter on the complaints received have not brought out any conflict of interest issue nor does it have any bearing on our loan portfolio," said Puri.

The enquiry brought out other aspects related to personal misconduct by a set of employees, for which appropriate disciplinary actions have been initiated, he said.

Ashok Khanna, the bank’s former group head of secured vehicle loans, was denied an extension after receiving two extensions post-retirement, Bloomberg reported on 13 July. The report said Khanna’s exit was linked to an “internal audit of the bank’s vehicle dealer lending as well as allegations of conflicts of interest in the purchase of global positioning systems (GPS) for vehicles financed by the bank".

“Ashok Khanna, being head of that business segment, had also participated in the enquiry process. Subsequently, he superannuated on 31 March 2020 upon expiry of his tenure and according to the original terms of employment," said Puri.

Mint reported on 15 July about top-level departures at HDFC Bank. Since March, the lender has seen the exits of Abhay Aima, group head of private banking, Ashok Khanna, group head of secured vehicle loans, and Munish Mittal, chief information officer, all of whom are HDFC Bank veterans and close aides of Puri.

According to news reports, Puri said at the AGM that his potential successor has been with the bank for 25 years. The bank had formed a six-member search committee last year to find a replacement for Puri and hired Egon Zehnder for assistance. Puri was an adviser to the search committee.

Puri said the Indian economy appears to have recovered sharply from April, in response to the unlocking.

“A whole range of high-frequency indicators ranging from oil consumption, electricity consumption, e-way bill, toll collections and the Purchasing Managers’ Index (PMI) showed marked improvement in May that sustained in June," Puri told the analysts.

The bank on Saturday received shareholder nod for issuing unsecured perpetual debt instruments (part of Additional Tier I capital), Tier II Capital bonds and long-term bonds (financing of infrastructure and affordable housing) on a private placement basis for up to 50,000 crore. The shareholders also approved the re-appointments of Malay Patel as an independent director, and Kaizad Bharucha as an executive director as well as the appointment of Renu Karnad as a non-executive director.

Shayan Ghosh
Shayan Ghosh is a national writer at Mint reporting on traditional banks and shadow banks. He has over a decade of experience in financial journalism. Based in Mint’s Mumbai bureau since 2018, he tracks interest rate movements and its impact on companies and the broader economy. His interests also include the distressed debt market, especially as India’s bankruptcy law attempts recoveries of billions worth of toxic assets.
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Updated: 20 Jul 2020, 06:40 AM IST
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