Mumbai, July 11 The Reserve Bank of India (RBI) said on Friday that it has imposed a monetary penalty of Rs 4.88 lakh on HDFC Bank and Rs 2.70 lakh on Shriram Finance after finding non-compliance with certain directions of the Central Bank.
The penalty on HDFC Bank was levied under the provisions of Section 11(3) of the Foreign Exchange Management Act (FEMA) after the private sector lender had ignored the ‘Master Direction – Foreign Investment in India’ while granting a term loan to its client, the Reserve Bank said in a statement.
"The RBI had issued a Show Cause Notice to the bank for the same, and in response to which HDFC Bank had submitted a written reply and had also made oral submissions thereon," the statement read.
After considering the facts of the case and the response given by HDFC Bank in the matter, the RB concluded to impose a penalty.
Similarly, the Reserve Bank laid a financial penalty on Shriram Finance Limited, a non-banking finance corporation (NBFC), for non-compliance with certain provisions of digital lending.
"The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 2.70 lakh on Shriram Finance Limited for non-compliance with certain provisions of the “Reserve Bank of India (Digital Lending) Directions, 2025” issued by RBI," the central bank stated.
The RBI had conducted a statutory inspection of the company concerning Shriram Finance's financial position as on March 31, 2024.
"Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the company advising it to show cause as to why a penalty should not be imposed on it for its failure to comply with the said directions," the bank said.
The company routed the loan repayments through the account of a third party, instead of the borrowers directly crediting the loan repayments to the company’s account, the RBI found in its inspection.
The Reserve Bank said it has imposed a penalty on Shriram Finance by issuing an order on July 08, 2025.
--IANS
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