HDFC Bank reported that the RBI imposed a ₹91-lakh penalty for non-compliance with certain regulatory guidelines on interest rates, outsourcing practices, and KYC procedures. The bank added that corrective measures have already been implemented. The private sector lender has been trading in red since morning and the stock has witnessed a slight decline. The share is currently trading at 1,004 against the previous close of 1,007.
RBI had conducted Statutory Inspection for Supervisory Evaluation (ISE 2024) of the bank with reference to the lender’s financial position as on March 31, 2024.RBI said, “Based on supervisory findings, non-compliance with the provisions of the BR Act, RBI directions and related correspondence in that regard, a notice was issued to the bank by the RBI advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said provisions of the BR Act and RBI directions.”
RBI said HDFC Bank had adopted multiple benchmarks within the same loan category, and it had outsourced the function of determining compliance with KYC norms of certain customers to its outsourcing agents. Also, a wholly-owned subsidiary of the bank undertook business which is not a permissible business that can be undertaken by a banking company under Section 6 of the BR Act, the RBI said. The central bank, however, said the penalty is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank, it added.