HDFC Bank shares slipped over 2 percent on Tuesday amid concerns related to the lender probing allegations of irregularities in lending practices in its vehicle finance business. The HDFC Bank has clarified that the matter will not cause any loss to the bank. The private bank stock fell as much as 2.61 percent to Rs 1,052.10 per share on the BSE. At 10:20 am, the shares traded 2.54 percent lower at Rs 1052.95 apiece. The banking gauge, Nifty Bank also declined 2 percent, dragged by weakness in HDFC Bank and others.
HDFC Bank has clarified that the issue of an alleged conflict of interest in its vehicle finance vertical is not related to the lending aspect of the business and hence it will have no bearing on the loan book or cause any loss to the bank.
“HDFC 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,” HDFC Bank told CNBC-TV18 earlier today.
The bank also reiterated that Ashok Khanna, who was on an extension of service retired on March 31, 2020, in the normal course of his employment. Further, Munish Mittal’s exit is a separate event as he has decided to pursue higher studies at a foreign university.
Global brokerage Macquarie believes that the senior management exits will have no major impact on the bank for now.
Macquarie expected the Reserve Bank of India (RBI) to give its approval for the new CEO of HDFC Bank as early as the end of this month. It said that the most likely candidate for CEO was Sashi Jagdishan, the current change agent.
The brokerage maintained an 'outperform' rating with a target price of Rs 1,124 per share.