RBI slaps Rs 1 crore penalty on HDFC for non-compliance of KYC norms


The Reserve Bank of India (RBI) has slapped a fine of Rs 1 crore on India’s leading private sector lender HDFC Bank for non-compliance of Know Your Customer (KYC) norms and anti-money laundering norms, and reporting of frauds.


The central bank said on its website that, “The fine pertains to submission of forged bill of entries (BoEs) by certain importers to HDFC Bank for remittance of foreign currency.”

“Examination in this regard revealed violations of RBI directions on KYC/AML norms (know your customer/anti-money laundering)and on reporting of frauds. A notice was issued to the HDFC Bank on why the monetary penalty should not be imposed for non-compliance with the directions. The fine was imposed through an order last Thursday after considering HDFC Bank’s reply, oral submissions made during the personal hearing and additional submission made,” RBI said.

The penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, it said.

The central bank said that the action is based on 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.

In a statement to exchanges, HDFC Bank said it has “taken necessary measures to strengthen its internal control mechanisms so to ensure that such incidents do not recur”.


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