RBI Imposes ₹1 Crore Penalty On HDFC Bank For Violating KYC Norms
The RBI said that supervisory evaluation of the bank (2016-17) revealed that the HDFC Bank had 'failed to exercise ongoing due diligence' with regards to 39 current accounts opened by its customers for bidding in Initial Public Offer.
The Reserve Bank of India has imposed ₹1 crore penalty on HDFC Bank for non-compliance with Know Your Customer (KYC) norms, the central bank said on Wednesday.
The RBI in a press release said that a supervisory evaluation of the bank (2016-17) revealed that the HDFC Bank had "failed to exercise ongoing due diligence" with regards to 39 current accounts opened by its customers for bidding in Initial Public Offer.
"It was observed that the transactions effected in these current accounts were disproportionate to the declared income and profile of the customers," it said. The central bank had issued a notice to the HDFC bank to explain as to why penalty should not be imposed for non-compliance with the KYC norms.
After receiving a reply from the bank, the RBI concluded that imposition of monetary penalty was warranted.
The RBI further added that the 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.