Penalty imposed for violation of Banking Regulation Act
Mumbai, May 28 (IANS)| The Reserve Bank of India (RBI) has imposed a penalty of Rs 10 crore on HDFC Bank Ltd for deficiencies in regulatory compliance. The central bank said that this penalty has been imposed on HDFC Bank for violation of the provisions of Section 6 (2) and Section 8 of the Banking Regulation Act, 1949.
RBI said in a statement that this action is based on deficiencies in regulatory compliance and is not related to the validity of any transaction or agreement entered into by the bank with its customers.
In a statement issued by the Reserve Bank of India, the Reserve Bank said that several whistleblower complaints regarding the bank’s auto loan portfolio were found and on investigation, several irregularities were found. In this regard, earlier the bank was issued a notice advising it to show cause as to why penalty should not be imposed on it for contravention of the provisions/directives of the Act.
After considering the bank’s reply to the show cause notice, the oral submissions made during the personal hearing and further clarifications and documents submitted by the bank, RBI came to the conclusion that the above amounted to contravention of the provisions of the Act. The allegation is substantiated and monetary penalty should be imposed on the bank.
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