RBI imposes Rs 1 crore penalty on HDFC Bank

By: |
Updated: Jan 29, 2020 8:51 PM

The RBI had issued a notice to the bank to show cause as to why penalty should not be imposed for non-compliance with the direction.

"It was observed that the transactions effected in these current accounts were disproportionate to the declared income and profile of the customers," it said.“It was observed that the transactions effected in these current accounts were disproportionate to the declared income and profile of the customers,” it said.

The Reserve Bank of India has imposed a penalty of Rs 1 crore on HDFC Bank for non-compliance with Know Your Customer (KYC) norms, the central bank said on Wednesday.

The RBI in a release said that supervisory evaluation of the bank (2016-17) revealed that the HDFC Bank had “failed to exercise ongoing due diligence” with regards to 39 current accounts opened by its customers for bidding in Initial Public Offer.

“It was observed that the transactions effected in these current accounts were disproportionate to the declared income and profile of the customers,” it said.

The RBI had issued a notice to the bank to show cause as to why penalty should not be imposed for non-compliance with the direction.

After considering the reply received from the bank and oral submissions made in the personal hearing, the RBI came to the conclusion that imposition of monetary penalty was warranted, the release said.

It further said the action is based on the deficiencies in regulatory compliance and “is not intended” to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Next Stories
1MPC minutes: Jump in COVID cases, lockdowns add uncertainty to growth outlook, says RBI Governor Shaktikanta Das
2COVID impact: IBA asks SLBCs to take decision on functioning of banks based on local situation
3Will surge in Covid cases shorten banking hours? Here’s what main union has told IBA