HDFC Bank AGM: RBI Asks Lender To Return Money Debited From Altico Account
A man looks at a mobile phone as he sits near a HDFC Bank branch in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

HDFC Bank AGM: RBI Asks Lender To Return Money Debited From Altico Account

The Reserve Bank of India has asked HDFC Bank Ltd. to refund money debited by the lender from the account of Altico Capital in September 2019, said chief executive Aditya Puri while speaking at the bank’s annual general meeting on Saturday.

The issue dates back to the time when Altico Capital was on the brink of default. At the time, HDFC Bank debited Rs 210 crore lying in Altico’s accounts with the lender. These funds had been received as part of external commercial borrowings raised from Mashreqbank PSC. While a bank has general lien on deposits of a borrower lying with it, in this case, HDFC Bank was holding those deposits in its capacity as an authorised dealer. A debate and a war of words between top bankers followed.

The RBI’s verdict on the matter, however, has gone against HDFC Bank. Speaking at the AGM, Puri said that the money will be returned.

We appropriated the money as per sound legal advice and now that the RBI has asked us to return the money, we will be doing so.
Aditya Puri, CEO, HDFC Bank

Also read: HDFC Bank Q1: Net Profit Up 19.5% On Strong Growth In Advances

Addressing Recent Exits

Puri, who was addressing his last AGM after a 26-year stint as the chief executive of the bank, also tried to clear the air on recent top management exits.

He confirmed three recent exits -- Abhay Aima (group head of private banking); Ashok Khanna (group head of secured vehicle loans); Munish Mittal (chief information officer).

Puri said that an enquiry had been conducted into the vehicle loans division, which brought out “personal misconduct” issues. Appropriate action has been taken against the employees, Puri said.

Internal enquiries carried out in the matter based on whistle blower complaints have brought out no conflict of interest issue. The enquiry did bring out another aspect related to personal misconduct exhibited by a set of employees, for which appropriate disciplinary actions have been taken. Based on internal enquiry findings appropriate action was taken against a set of employees in the auto loan business segment for their act of personal misconduct. Mr Ashok Khanna, being head rep for the business section, had also participated in the inquiry process.
Aditya Puri, CEO, HDFC Bank

While not specifying the reason for Aima’s exit, Puri said the exit was “amicable”.

Mittal, meanwhile, has left to study at Oxford, Puri said.

Upcoming Succession

Puri retires at the end of October as chief executive. In April, the bank finalised names of three potential successors and sent them to the RBI for approval. While the regulator’s final word is awaited, Puri said “in his mind, the successor is clear.”

There has been a lot of talk about the successor not being with us for a long time. Our potential successor has been with us for 25 years. My successor was always in place, at least in my mind. It is now for RBI to decide what was been given to them.
Aditya Puri, CEO, HDFC Bank (Speaking At AGM)

The names of possible successors sent by HDFC Bank to the RBI include Sashidhar Jagdishan and Kaizad Bharucha, and Sunil Garg, global head of Citi Commercial Bank, BloombergQuint reported earlier.

Also read: HDFC Bank’s Next CEO: Know The Contenders

Note: This story corrects an earlier version to include the exact transcript of Aditya Puri’s comment on the enquiry into the vehicle loans division.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.