“RBI has imposed, by an order dated May 27, 2021, a monetary penalty of Rs 10 crore 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),” RBI said.
The main highlights of the story are:
- The Reserve Bank of India imposed a penalty of Rs 10 crore on HDFC Bank due to deficiencies in regulatory compliance.
- The matter highlighted from a complaint to RBI regarding irregularities in the bank’s auto loan portfolio which revealed violations of the provisions of Section 6(2) and section 8 of the Banking Regulation Act 1949
- The HDFC bank’s executives forced their auto loan borrowers to buy GPS devices with their auto loans. This way they are the marketing and selling of third-party non-financial products along with auto loans to bank customers.
- The regulator has imposed a penalty after considering the bank’s reply to the show cause notice, oral submissions during personal hearing, and examination of further documents furnished by the lender.