The RBI fined HDFC Bank ₹91 lakh for violating banking regulations.

HDFC Bank Ltd. was fined ₹91 lakh by the Reserve Bank of India (RBI) for breaking Section 19(1)(a) of the Banking Regulation Act, 1949. The Bank's failure to follow certain criteria regarding advance interest rates, risk management, the code of conduct for financial service outsourcing, and know-your-customer (KYC) standards is another reason for the penalty.

HDFC Bank has implemented several benchmarks within the same loan category, according to a notification from the RBI. Additionally, it stated that a fully owned subsidiary of the Bank carried out operations that were prohibited by Section 6 of the Banking Regulation Act for a banking firm. Furthermore, the lender has delegated to its outsourcing agents the responsibility of guaranteeing KYC compliance for specific clients. RBI carried out a statutory inspection for supervisory assessment (ISE 2024) of HDFC Bank with reference to the lender's financial situation as of March 31, 2024. Based on supervisory findings of non-compliance with RBI directives and associated correspondence, HDFC Bank received a letter asking it to provide justification for why it should not be penalized for its noncompliance.

It states, "After considering HDFC Bank's reply to the notice and additional submissions made by it, RBI found, inter alia, that the charges against the Bank were sustained, warranting imposition of monetary penalty." The RBI noted, however, that the penalty is based on regulatory compliance shortcomings and is not meant to cast doubt on the legality of any agreements or transactions that HDFC Bank has made with its clients. "Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the Bank."