RBI Imposes Rs 91 Lakh Penalty on HDFC Bank for KYC Violations and Regulatory Lapses
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹91 lakh on HDFC Bank, the country’s largest private sector bank, for violations of statutory and regulatory norms.
According to RBI, the bank failed to comply with certain provisions of the Banking Regulation Act and several RBI guidelines, including those related to Know Your Customer (KYC) norms.
The central bank stated that the penalty was imposed after examining HDFC Bank’s response to the notice issued earlier. RBI found that the explanations submitted by the bank did not satisfactorily address the violations, and therefore the charges stood confirmed.
What led to the penalty?
The RBI observed deficiencies in the bank’s adherence to multiple guidelines, including:
- Directions on Interest Rate on Advances
- Code of Conduct and Risk Management guidelines for outsourcing financial services
- KYC compliance requirements
RBI’s inspection
As part of its annual supervisory cycle, RBI conducted a Statutory Inspection for Supervisory Evaluation (ISE) based on the bank’s financial position as of March 31, 2024.
During this review, the regulator identified non-compliance with specific provisions of the Banking Regulation Act and related RBI directions. A notice was then issued to HDFC Bank seeking clarification. After evaluating the bank’s reply and additional submissions, RBI concluded that the violations were valid, which led to the imposition of the penalty.
RBI clarified that the penalty is purely for regulatory non-compliance and does not question the bank’s financial stability or customer service operations.
