RBI penalises HDFC Bank for second time in four months

Reserve Bank of India (RBI) has imposed a penalty of Rs 1 crore on HDFC Bank for non-compliance of Know Your Customer (KYC) norms and anti-money laundering (AML) norms, and for failure to report frauds. The RBI on February 12, 2019, had imposed a penalty of Rs 20 lakh on the bank for similar charges.

For the latest penalty, the regulator said that it received a reference from customs authorities regarding the submission of forged bill of entries (BoEs) by certain importers to the bank for remittance of foreign currency.

'Examination in this regard revealed violations of RBI directions on 'KYC/AML norms' and on reporting of frauds based on which a notice was issued to the bank advising it to show cause as to why monetary penalty should not be imposed for non-compliance with the aforesaid directions," the RBI said in a statement on June 18.

The central bank said that it considered the lender's reply, oral submissions made during the personal hearing and additional submission made by the bank after the personal hearing, to the conclusion that the charges of non-compliance with regulatory norms were substantiated and warranted imposition of monetary penalty.

However, it added that the action was based on deficiencies in regulatory compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

HDFC Bank