Reserve Bank Of India Imposes Penalty On HDFC Bank, Axis Bank

The Reserve Bank of India on Tuesday announced that it has imposed a monetary penalty on HDFC Bank Ltd. and Axis Bank Ltd.

HDFC Bank has been fined Rs 1 crore for alleged non-compliance with various RBI directives, including those related to 'Interest Rate on Deposits', 'Recovery Agents', 'Customer Service in Banks', and guidelines on outsourcing financial services, according to the order.

The penalty follows the RBI’s Statutory Inspection for Supervisory Evaluation for 2022, which revealed several violations, such as offering gifts worth more than Rs 250 to depositors at the time of accepting certain deposits, opening certain savings deposit accounts in the name of ineligible entities, and failing to ensure that customers are not contacted after 7 p.m. and before 7 a.m.

Axis Bank, on the other hand, has been fined Rs 1.91 crore for allegedly contravening provisions of the Banking Regulation Act, 1949, and non-compliance with RBI directives, including those on 'Interest Rate on Deposits', 'Know Your Customer', and 'Collateral-Free Agricultural Loans'.

The RBI's inspection of Axis Bank in 2023 revealed multiple violations, including opening accounts for ineligible entities, issuing multiple customer identification codes, and obtaining collateral for certain agricultural loans below the Rs 1.60 lakh threshold.

Both penalties were imposed based on deficiencies in regulatory compliance and are not meant to affect the validity of any customer agreements.

The RBI emphasized that the penalties are without prejudice to any other actions that may be taken against the banks.