HDFC Bank Penalised ₹91 Lakh by RBI Over Regulatory Lapses
RBI penalises HDFC Bank ₹91 lakh for regulatory violations.
The Reserve Bank of India has imposed a penalty of ₹91 lakh on HDFC Bank, the country’s largest private sector lender, for multiple breaches of statutory and regulatory norms. The action follows a detailed statutory inspection conducted with reference to the bank’s financial position as on March 31, 2024, which uncovered serious deficiencies in compliance frameworks.
According to the RBI, HDFC Bank contravened provisions of the Banking Regulation Act and failed to adhere to directions on interest rates on advances, risk management in outsourced financial services, and Know Your Customer (KYC) guidelines. The central bank specifically pointed out that the bank used multiple benchmarks within the same loan category and improperly delegated KYC compliance checks for certain customers to third-party outsourcing agents.
In a separate violation, a wholly-owned subsidiary of HDFC Bank was found engaging in activities not permitted under Section 6 of the Banking Regulation Act. The RBI clarified that while the penalty addresses regulatory and supervisory lapses, it does not question the validity of any customer transactions or agreements entered into by the bank.
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This is not the first time HDFC Bank has faced regulatory action. In 2020, the RBI had barred the bank from issuing new credit cards for over a year due to repeated outages and deficiencies in its IT systems. As India’s largest credit card issuer with more than 25 million cards in force, the bank serves a massive customer base, making compliance failures particularly significant.
The penalty, though modest in relation to the bank’s size, serves as a stern reminder from the Reserve Bank about the non-negotiable nature of regulatory adherence. The central bank emphasised that its action is based solely on deficiencies identified during supervision and is intended to enforce discipline rather than disrupt customer services.
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