HDFC Bank's Managing Director and Chief Executive Aditya Puri on July 18 said "disciplinary action" has been taken against a few employees from the auto loans business for exhibiting "personal misconduct". The remarks by Puri in an address to shareholders came amid reports about the circumstances under which the head of the auto loan business retired in March and also about probes reportedly initiated by the bank to ascertain conflict of interest.
Addressing his last annual general meeting after building the bank into the second largest by assets in India, and the most valued by investors, Puri denied there being any "conflict of interest" found by a probe launched following whistleblower complaints.
"Enquiry did bring out another aspect related to personal misconduct exhibited by a set of individuals for which appropriate disciplinary actions have been taken," Puri said.
"(Ashok) Khanna being head of the referred business segment had also participated in the enquiry process," he said.
Puri also seemed to suggest that there was no "co-relation" between the misconduct of a few employees, the state of the auto loans portfolio or any losses suffered.
Auto loans contributed a fifth of the bank's retail loans and a tenth of its overall assets. Outstanding auto loans reduced to Rs 81,082 crore as of June 2020, from Rs 83,935 crore in March and Rs 81,913 crore in the year-ago period.
Seeking to allay concerns over two more senior managerial exits, Puri said its chief information officer Munish Mittal has left to pursue further studies at Oxford after spending 25 years at the bank and achieving a set of milestones given to him after he expressed a desire to move on.
Another executive left to join a spiritual group after choosing a successor to hand over the charge, Puri said, making it clear that these are not unexpected exits happening due to his departure from the bank in October.
Puri admitted to have received a communication from the Reserve Bank to pay Rs 200 crore in the Altico Capital matter, in line with the reports in a section of media, which said the lender has been asked to pay UAE's Mashreq Bank.
Seeing a stress in the realty-focused lender, HDFC Bank had netted off Altico's money held by it in a fixed deposit to cover its exposure in the lender in September 2019, leading to a controversy where it's conduct was denounced as "selfish" by its larger rival SBI.
"We appropriated the money based on sound legal advice. However, since the regulator has directed us to repay, we are going ahead and doing that,” Puri said.
“We (HDFC Bank) will then come pari passu with the rest of the creditors and we will also get our share (for the loan exposures),” Puri added.