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HDFC Bank denies allegations of not flagging forgery, clarifies on loan 'processing fee'

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HDFC Bank said it categorically states applications that are identified to be discrepant/suspicious and attempts to provide an opportunity to the people to come and clarify.

HDFC Bank denies allegations of not flagging forgery, clarifies on loan 'processing fee'
India’s largest private lender HDFC Bank Limited issued a clarification on Friday regarding a whistleblower complaint to the Reserve Bank of India (RBI) that the lender levied a fee to deter customers who submitted forged documents to get loans instead of reporting them to law enforcement.
“The bank categorically states once such applications are identified to be discrepant/suspicious, the bank attempts to provide an opportunity to these people to come and clarify. However, in a number of cases, applicants do not respond,” the bank said in a statement.
HDFC Bank also listed the steps that it takes in such cases. It said such loan applications are declined, internal data base is updated, to prevent any future application from the customer and industry data base is updated, which helps prevent such borrowers from indulging in such practices with any other banks, NBFCs and financial institutions.
The development comes against the backdrop of reports on September 30 that referred to a complaint filed with RBI in July, which stated that a customer applied for a loan with HDFC Bank using forged documents and the lender demanded a fine and called it a ‘processing fee. ’
HDFC Bank clarified that it does not waive the processing costs from customers who come forward in such discrepant/suspicious cases. The processing fee is charged towards defraying the cost of efforts of the bank for additional due diligence and verification and not for closing the cases, it explained.
“Collection or non-collection of processing fees has no bearing on reporting to the internal and Hunter database (industry data base) or attempts to report to the police authorities. In fact, the Bank files police complaints in a number of cases, where processing cost was paid by individuals,” HDFC Bank said.
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