RBI Slaps ₹75 Lakh Fine on HDFC Bank for KYC Norm Violations

Mumbai: The Reserve Bank of India (RBI) has imposed a ₹75 lakh penalty on HDFC Bank, the country’s largest private-sector lender, for failing to comply with Know Your Customer (KYC) guidelines. The decision came after a detailed review of the bank’s response to a showcause notice and additional submissions.

RBI’s investigation revealed that HDFC Bank did not properly classify certain customers into low, medium, or high-risk categories based on its assessment. Additionally, the bank assigned multiple customer identification codes to some individuals instead of following the Unique Customer Identification Code (UCIC) requirement.

These issues were identified during a statutory inspection of the bank’s financial position as of March 31, 2023. After reviewing the findings and related correspondence, the RBI concluded that the violations warranted a monetary penalty.

However, the central bank clarified that the penalty strictly pertains to regulatory compliance deficiencies and does not impact the validity of any transactions or agreements between HDFC Bank and its customers. The RBI also noted that this action does not rule out further regulatory measures if necessary.

Despite this setback, HDFC Bank reported a 2.2% year-on-year growth in standalone net profit for Q3FY25, reaching ₹16,736 crore. However, the net profit saw a slight dip compared to ₹16,821 crore in Q2FY25. The bank’s interest earnings rose 7.6% year-on-year to ₹76,007 crore, while interest expenses increased by 7.7% to ₹45,354 crore in the same period.

News Source : “Information for this article was gathered from a variety of reliable news outlets.”