Mumbai: The Reserve Bank of India (RBI) has imposed a penalty of Rs 91 lakh on HDFC Bank for violating provisions of the Banking Regulation Act and failing to meet certain regulatory and statutory requirements, including Know Your Customer (KYC) norms.
The RBI said the action followed a Statutory Inspection for Supervisory Evaluation of the bank’s financial position as of March 31, 2024.
The regulator issued a notice after finding instances of non-compliance, and confirmed the violations after reviewing the bank’s responses and additional submissions.
According to the RBI, HDFC Bank used multiple benchmarks within the same loan category and outsourced KYC compliance checks for some customers to external agents.
It also noted that a wholly owned subsidiary carried out activities not permitted for a banking company under Section 6 of the Banking Regulation Act.
The central bank clarified that the penalty reflects compliance deficiencies and does not affect the validity of any customer transactions or agreements.
It added that the monetary penalty is without prejudice to further regulatory action.
In a separate action, the Reserve Bank of India imposed a penalty of Rs 3.1 lakh on Mannakrishna Investments for violating certain governance-related provisions under the Master Direction for
Non-Banking Financial Company – Scale Based Regulation, 2023.