InvestorQ : Why has RBI imposed a Rs.10 crore penalty on HDFC Bank?
Dilmini Mercia made post

Why has RBI imposed a Rs.10 crore penalty on HDFC Bank?

Dawn Cherian answered.
2 years ago

RBI imposed a monetary penalty of Rs.10 crore on HDFC Bank for contravention of select provisions of the Banking Regulation Act. This was after the RBI found irregularities after the examination of a complaint filed by a whistle-blower pertaining to the auto loan portfolio of HDFC Bank. The bank had charged customers higher for in-built tracking devices in cars without the knowledge the customers. This was breach of faith in dealing with customers.

Earlier, the RBI had issued a show cause notice to HDFC Bank asking them why penalty should not be imposed for contravention of the Act. The RBI considered the response of the bank to the show cause notice as well as oral submissions during the hearing and decided to impose this penalty as a deterrent measure. This could only add to the problems of HDFC Bank where the bank has been barred from seeking new card customers till further notice.