The RBI made it clear that this financial penalty is specifically tied to regulatory compliance shortcomings and has nothing to do with the legitimacy of any transactions or agreements the bank has made with its clients. Furthermore, the penalty has no bearing on any further actions the RBI may take against HDFC Bank.
HDFC Bank Limited has been fined Rs 75 lakh by the Reserve Bank of India (RBI) for failing to follow its Know Your Customer (KYC) regulations. The order was issued on March 24, 2025, in accordance with the Banking Regulation Act of 1949’s Section 47A(1)(c) read with Section 46(4)(i). This move demonstrates the RBI’s dedication to upholding strict regulatory standards in the banking industry.
The financial status of HDFC Bank as of March 31, 2023, was taken into consideration during the Statutory Inspection for Supervisory Evaluation (ISE 2023) process. After supervisory investigations revealed that the bank had not followed RBI instructions, the bank was given a notice to explain why a penalty should not be applied.
After examining HDFC Bank’s response and further submissions, the RBI found two significant non-compliance areas:
Failure to classify risk: The bank did not classify certain of its clients into low, medium, or high-risk groups according to their perceived level of risk.
Several customer identification codes: Rather than keeping a Unique Customer Identification Code (UCIC) for every customer, HDFC Bank assigned several customer identification codes to certain clients.
The RBI made it clear that this financial penalty is specifically tied to regulatory compliance shortcomings and has nothing to do with the legitimacy of any transactions or agreements the bank has made with its clients. Furthermore, the penalty has no bearing on any further actions the RBI may take against HDFC Bank.
