A whistleblower has alleged that HDFC Bank has levied processing fees on customers who had submitted forged or suspected documents to get loans — instead of reporting them to the authorities.

The whistleblower has reportedly written to the Reserve Bank of India (RBI) in July that the private sector lender collected a fine which it called “processing fee” after finding that a customer had submitted fake documents to get a loan. It alleged that the penalty was in return for not taking any regulatory or legal action.

Responding to the charges, a spokesperson for the bank said that once such applications are identified to be discrepant or suspicious, the bank attempts to provide an opportunity to these people to come and clarify.

However, in number of cases, applicants do not respond.

The spokesperson added that in all cases, the bank “without exception”, takes steps like declining the loan application and updating the internal data base to prevent any future application from the customer.

Further, the lender updates the industry data base to prevent such borrowers from indulging in such practices with any other banks, non banking finance companies (NBFCs) and financial institutions.

“The bank 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 said.

HDFC Bank however, added that the collection or non-collection of processing fees has no bearing on reporting to the internal and 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,” the bank said.

Shares of HDFC Bank today ended marginally lower to Rs 1582.55 at the BSE.