RBI Imposes Rs 10 Crore Penalty On HDFC Bank

The Reserve Bank of India (RBI) declared a monetary penalty of Rs. 10.00 crore on HDFC Bank for violating section 6(2) and section 8 of the Banking Regulation Act, 1949. The RBI levied this fine in accordance with the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Act.

This procedure is based on regulatory compliance concerns and is not meant to be a judgment on the legitimacy of any transaction or agreement among the bank and its customers.

Why RBI imposed a Rs 10 crore penalty on HDFC Bank?

An investigation into the marketing and sale of third-party non-financial products to the bank’s customers, prompted by a whistleblower objection to the RBI about irregularities in the bank’s auto loan portfolio, revealed, among other things, a breach of the aforementioned provisions of the Act and regulatory directions. In support of this, a notice was sent to the bank, instructing it to show cause why a penalty should not be imposed for violating the Act’s/directions provisions.

After recognizing the bank’s acknowledgment of the show-cause notice, oral submissions made during the personal hearing, and examination of further clarifications/documents provided by the bank, RBI concluded that the aforementioned charge of contravening Act provisions was substantiated, warranting imposition of monetary penalty.

LEAVE A REPLY

Please enter your comment!
Please enter your name here