INSUBCONTINENT EXCLUSIVE:
RBI imposed the penalty on HDFC Bank due to offense of specific areas under Banking Policy ActThe Reserve Bank of India (RBI) on Friday,
Might 28, enforced a monetary charge of Rs 10 crore on HDFC Bank Limited for violation of arrangements of area 6( 2) and section 8 of the
Banking Regulation Act, 1949 (the Act)
The reserve bank said in a declaration today that this action is based upon the shortages in regulative compliance and is not intended to
pronounce upon the validity of any transaction or an arrangement participated in by the bank with its customers
(Also Check Out: RBI Asks HDFC Bank To Stop Digital Launches, New Credit Cards )According to the declaration, an evaluation of documents in
the matters of marketing and the sale of third-party non-financial items to the bank's consumers, developing from a whistle blower problem
to the RBI, regarding irregularities in the car loan portfolio of the bank, revealed violation of the above-mentioned arrangements of the
Banking Regulation Act.The RBI said that after considering the bank's reply to the show cause notice, the oral submissions made throughout
the personal hearing, as well as assessment of more clarifications or documents provided by the bank, it was concluded that the aforesaid
charge of breach of provisions of the Banking Regulation Act was corroborated and a necessitated imposition of monetary penalty.Section 8 of
the Banking Regulation Act specifies that a bank can not straight or indirectly deal with buying, selling, or bartering of items
A bank might barter the deals relating to costs of exchange received for collection or negotiation.The penalty was enforced in the workout
of powers vested by the main bank under the provisions of Section 47A( 1 )(c) read with Area 46( 4 )(i) of the Banking Guideline
Act.Meanwhile, last year, the Reserve Bank directed the private-sector loan provider to temporarily stop all launches of its upcoming
digital business-generating activities and sourcing of brand-new credit card customers after a power failure of its main information centre.
