HDFC Bank said Thursday it will refund the “GPS device commission” charged to auto loan borrowers for six years, a move probably prompted by a RBI directive that is set to stop the country’s largest private lender from being haunted by a past sin.

Last year, the bank’s then chief executive Aditya Puri admitted to irregularities in the auto loan disbursements by its team. On 29 May, the Reserve Bank of India (RBI) also fined HDFC Bank an amount of Rs 10 crore for the lapses.

The bank in a public notice published in newspapers said that it would refund the “GPS device commission to auto loan customers who had availed of such device as a part of the auto loan funding during the period FY 2013-14 to FY 2019-20”.

The refund, the bank said, would be credited to the customer's repayment bank account as registered with the bank. In case such bank accounts are closed, customers can contact the bank from their registered email ids or make a phone call within the next 30 days, the notice added.

The devices, manufactured by a Mumbai firm, Trackpoint GPS, cost about Rs 18,000 a piece and was bundled with every auto loan.

The move comes close on the heels of the RBI imposing a fine of Rs 10 crore on the bank for forcibly bundling a GPS device with the auto loan product. It was for the first time that the regulator was penalising a lender for mis-selling an auto loan product. This also happened to be the largest RBI fine on HDFC Bank.

The issue first surfaced on social media when a whistleblower alleged that the executives of the bank were forcing auto loan borrowers to buy the GPS device. The bank was forced to respond following a sustained social media campaign by the whistleblower. Puri acknowledged the issue and said that an internal probe was conducted against a few erring employees. A few executives of the auto loan division were asked to leave.