The Reserve Bank of India (RBI) has levied fines on HDFC Bank and Punjab & Sind Bank for non-compliance with regulatory guidelines, while KLM Axiva Finvest also faces a penalty for dividend rule breaches.
The Reserve Bank of India (RBI) has taken action against several financial institutions for failing to adhere to its regulatory guidelines. HDFC Bank, one of the largest private sector banks in India, has been penalized with a fine of ₹75 lakh due to certain non-compliance issues. According to the RBI's statement, the penalty was imposed because of lapses in adhering to the Know Your Customer (KYC) directives.
The RBI's inspection revealed that HDFC Bank had not classified some customers according to their risk categories (low, medium, and high). Furthermore, the bank had issued multiple identification codes instead of a Unique Customer Identification Code (UCIC) to certain customers.
The central bank conducted a statutory inspection based on the bank's financial position as of March 31, 2023.
In addition to HDFC Bank, KLM Axiva Finvest, a non-banking financial company (NBFC), has been fined ₹10 lakh. This penalty stems from non-compliance with the RBI Directions 2023 concerning the declaration of dividends. The RBI stated that KLM Axiva Finvest declared dividends for the financial year 2023-24, despite not meeting the minimum regulatory requirements in the preceding three financial years.
Similarly, Punjab & Sind Bank faces a penalty of ₹68.20 lakh for failing to establish a centralized repository for large shared risks in banks, ensuring universal access to banking services, and properly implementing basic savings bank deposit account regulations.
The RBI acts as a regulator for the banking system, responsible for enforcing banking guidelines. However, it is important to note that these penalties imposed on the banks will not affect services provided to customers.
