The Reserve Bank of India (RBI) has imposed a hefty fine of Rs 75 lakh on HDFC Bank, a leading private sector banking giant, for non-compliance with Know Your Customer (KYC) norms.
In a statement released on Wednesday, the RBI said the penalty was imposed because the bank failed to adhere to the guidelines issued in 2016 regarding KYC norms.
The latest amendment to these guidelines was made in November 2024.
The RBI stated that during an inspection conducted in March 2023, several lapses were identified in the bank’s compliance with KYC regulations.
Following this, a show-cause notice was issued to HDFC Bank. However, the explanation provided by the bank did not satisfy the RBI, leading to the imposition of the penalty, reports said.
The violations included failure to categorize customers based on risk levels and issuing a single identification code to multiple individuals instead of unique customer codes.
RBI’s clarification
The RBI clarified that this penalty is strictly for regulatory non-compliance and does not affect customer transactions or agreements.
It emphasized that the penalty is unrelated to customer dealings and is solely aimed at ensuring adherence to regulatory standards.
