RBI Fines HDFC Bank, Punjab & Sind Bank for Regulatory Violations

Mumbai, 27-03-2025: The Reserve Bank of India (RBI) has slapped monetary penalties on HDFC Bank and Punjab & Sind Bank for violating regulatory guidelines. In an official statement issued on Wednesday, RBI announced fines of ₹75 lakh on HDFC Bank and ₹68.2 lakh on Punjab & Sind Bank for non-compliance with banking regulations.

Punjab & Sind Bank Fined for Reporting Failures

RBI found Punjab & Sind Bank guilty of failing to report large loan exposures and mishandling basic savings accounts. Key violations included:

• Failure to report large exposures – The bank did not inform the Central Repository of Information on Large Credits (CRILC) about certain borrowers with loans of ₹5 crore and above, violating RBI’s credit monitoring rules.
• Irregularities in savings accounts – Some Basic Savings Bank Deposit Account (BSBDA) holders were wrongly allowed to open regular savings accounts, which goes against financial inclusion norms.

RBI stressed that the fine is solely for non-compliance with regulatory norms and does not affect transactions between the bank and its customers.

HDFC Bank Penalized for Customer Identification Issues

An inspection of HDFC Bank’s financial records as of March 31, 2023, revealed multiple compliance lapses. The violations included:

• Incorrect customer risk classification – The bank failed to properly categorize some customers as low, medium, or high risk, as required by RBI guidelines.
• Multiple customer identification codes – Instead of assigning a Unique Customer Identification Code (UCIC), the bank issued multiple IDs to certain customers, breaching RBI’s directives.

After assessing the bank’s response, RBI concluded that the breaches warranted a financial penalty. The central bank clarified that the fine is for regulatory violations and does not impact the legitimacy of customer transactions.

RBI also stated that further action may be taken against both banks if necessary.