HDFC Bank Fined ₹91 Lakh by RBI for Non-Compliance with Banking Norms
Moneylife Digital Team 28 November 2025
Reserve Bank of India (RBI) has imposed a penalty of ₹91 lakh on HDFC Bank Ltd for violating Section 19(1)(a) of the Banking Regulation Act, 1949. The penalty also stems from the Bank’s non-compliance with certain directives related to interest rates on advances, risk management guidelines, the code of conduct for outsourcing financial services and know-your-customer (KYC) norms.
 
In a release, RBI stated that HDFC Bank had adopted multiple benchmarks within the same loan category. It also noted that a wholly owned subsidiary of the Bank engaged in business activities not permitted for a banking company under Section 6 of the Banking Regulation Act. Additionally, the lender had outsourced the task of ensuring compliance with KYC norms for certain customers to its outsourcing agents.
 
With reference to the lender's financial position as of 31 March 2024, RBI conducted a statutory inspection for supervisory evaluation (ISE 2024) of HDFC Bank. Based on supervisory findings of non-compliance with RBI directions and related correspondence, a notice was issued to HDFC Bank advising it to show cause why a penalty should not be imposed on it for its failure to comply with the directions. 
 
The central bank says, "After considering HDFC Bank's reply to the notice and additional submissions made by it, RBI found, inter alia, that the charges against the Bank were sustained, warranting imposition of monetary penalty."
 
However, RBI clarified that the penalty is based on deficiencies in regulatory compliance and is not intended to pronounce on the validity of any transaction or agreement entered into by HDFC Bank with its customers. "Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the Bank."
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