RBI slaps penalty of Rs 1 crore on HDFC Bank

Updated : January 30, 2020 11:40 AM IST

It was observed that the transactions effected in 39 current accounts were disproportionate to the declared income and profile of the customers, RBI said.

A notice was issued to the HDFC bank to show cause as to why penalty should not be imposed for non-compliance with the direction.

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.

In a release issued on Wednesday, the central bank said that Supervisory Evaluation of the HDFC Bank for FY17 revealed that the 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, RBI said.

On the above basis, a notice was issued 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, RBI came to the conclusion that the aforesaid charge of noncompliance with the direction was sustained and warranted imposition of monetary penalty,” RBI statement said.

The apex bank also said that 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.

RBI slaps penalty of Rs 1 crore on HDFC Bank

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