New Delhi: The Reserve Bank on Thursday imposed a penalty of INR 10 crore on HDFC bank for not complying with the regulatory guidelines on auto loans. The penalties have been imposed after an inspection conducted by the RBI on a whistleblower complaint regarding irregularities in the auto loan portfolio of the bank, the central bank said in a statement.
“RBI has imposed, by an order dated May 27, 2021, a monetary penalty of INR 10.00 crore (Rupees ten crore only) on HDFC Bank Limited (the bank) for contravention of provisions of section 6(2) and section 8 of the Banking Regulation Act, 1949 (the Act). This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Act,” RBI said.
This action is based on 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 central bank noted.
A notice was issued to the HDFC bank advising it to show cause as to why penalty should not be imposed on it for such non-compliance with the directions.
“After considering the bank’s reply to the show cause notice, oral submissions made during the personal hearing and examination of further clarifications/documents furnished by the bank, RBI came to the conclusion that the aforesaid charge of contravention of provisions of the Act was substantiated and warranted imposition of monetary penalty,” the statement added.