RBI penalises HDFC Bank Rs 1 crore for failing KYC

MUMBAI: The RBI has imposed a Rs 1-crore penalty on HDFC Bank for failing to comply with the central bank’s know your customer (KYC) norms. The RBI said that 39 current accounts opened by the bank had transactions disproportionate to the declared income and profile of the customers.
“Based on the observations made during the on-site inspection for FY17, a scrutiny of 39 current accounts opened by its customers for bidding in initial public offer was conducted by the RBI, which revealed that the bank had failed to exercise ongoing due diligence in those accounts,” the central bank said.
The RBI then issued a showcause notice to the bank. After considering the bank’s response, the central bank concluded that the charge of non-compliance with the direction was sustained and warranted imposition of monetary penalty.
“This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers,” the RBI said.
HDFC Bank too informed the exchange of the penalty as part of its disclosures. Last year in July, the RBI had penalised a host of public sector banks for violation of KYC norms.