RBI imposes fine of Rs 10-crore on HDFC Bank

RBI imposes fine of Rs 10-crore on HDFC Bank

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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:

  1. The Reserve Bank of India  imposed a penalty of Rs 10 crore on HDFC Bank due to deficiencies in regulatory compliance.
  2. 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
  3. 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.
  4. 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.

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