HDFC Bank Share Prices Fall After RBI Imposes Rs 91 Lakh Fine For Violations Including KYC Lapses

HDFC Bank Fined ₹91 Lakh by RBI for Non-Compliance with Regulatory Guidelines

HDFC Bank has faced a significant penalty of ₹91 lakh imposed by the Reserve Bank of India (RBI) for non-compliance with certain regulatory guidelines on interest rates, outsourcing practices, and Know Your Customer (KYC) procedures.

Reasons for the Penalty

• Auditing revealed that HDFC Bank adopted multiple benchmarks within the same loan category.
• The bank outsourced the function of determining compliance with KYC norms of certain customers to its outsourcing agents.
• A wholly-owned subsidiary of the bank undertook business which is not a permissible business that can be undertaken by a banking company under Section 6 of the Banking Regulation Act (BR Act).

RBI's Statement on the Penalty

The RBI stated that the penalty is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.

Further, the RBI added that the imposition of monetary penalty is without prejudice to any other action that may be initiated by the RBI against the bank.

Impact on HDFC Bank's Stock

HDFC Bank's stock has been trading in red since morning, with a slight decline. As of now, the share is currently trading at ₹1,004 against the previous close of ₹1,007.

The bank has already implemented corrective measures to address the issues highlighted by the RBI during the Statutory Inspection for Supervisory Evaluation (ISE 2024).