RBI imposes monetary penalty on HDFC Bank and Punjab & Sind Bank
RBI stated it had performed a required inspection of the bank regarding its financial status as of March 31, 2023.
The Reserve Bank of India (RBI) has imposed monetary penalties on HDFC Bank and Punjab & Sind Bank for non-compliance with its regulatory guidelines. HDFC Bank is slapped with a Rs 75 lakh penalty for violations related to KYC norms, and Punjab & Sind Bank was fined Rs 68.2 lakh for lapses in reporting large exposures and maintaining basic savings accounts.
Why has HDFC Bank been imposed the monetary penalty, here to know
RBI stated it had performed a required inspection of the bank regarding its financial status as of March 31, 2023. The RBI sent a letter to the bank telling it to show cause as to 'why penalty should not be imposed on it for its failure to comply with the abovementioned directions' depending on supervisory findings of non-compliance with the central bank's orders.
One difference was that the bank did not classify some customers into low, medium, or high risk categories depending on its evaluation and risk perception, as is required by the RBI orders.
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The bank also assigned several customer identification codes to some clients rather than a Unique Customer Identification Code (UCIC) for every customer, which also goes against RBI policy.
In a separate order, a monetary penalty of Rs 68.2 lakh has been imposed on on Punjab & Sind Bank for non-compliance with guidelines issued by the central bank on ‘Creation of a Central Repository of Large Common Exposures – Across Banks’ and ‘Financial Inclusion - Access to Banking Services – Basic Savings Bank Deposit Account (BSBDA)’.
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