RBI penalises HDFC Bank with Rs1cr for KYC lapses

MUMBAI: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs1 crore on HDFC Bank Ltd for non-compliance with Master Direction on Know Your Customer (KYC).

“The penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the direction issued by RBI,” an official statement said.

Based on the observations made during the on-site inspection for Supervisory Evaluation of HDFC Bank Ltd undertaken by RBI for the financial year ended March 31, 2017, a scrutiny of 39 current accounts opened by its customers for bidding in Initial Public Offer (IPO) was conducted by RBI.

RBI said the inspection revealed, inter alia, that the bank had failed to exercise on-going due diligence in those accounts. “It was observed that the transactions effected in these current accounts were disproportionate to the declared income and profile of the customers,” it added.

On the basis of the findings, 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 said it came to the conclusion that the charge of non-compliance with the direction was sustained and warranted imposition of monetary penalty.


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