RBI imposes monetary penalty on HSBC Limited
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹29.60 lakh on The Hongkong and Shanghai Banking Corporation Limited (HSBC) for failing to comply with certain Reserve Bank of India directions regarding credit card, debit card, and rupee-denominated co-branded prepaid card operations.
The penalty follows the findings of the Statutory Inspection for Supervisory Evaluation (ISE 2022) conducted by the RBI based on HSBC’s financial position as of March 31, 2022. The inspection revealed non-compliance with Reserve Bank of India directions, specifically the bank’s failure to prevent negative amortization in the computation of Minimum Payment Due in certain credit card accounts.
After issuing a notice to HSBC and considering the bank’s response, including oral and additional submissions, the Reserve Bank of India determined that the violation warranted the monetary penalty. The Reserve Bank of India clarified that this action is based on deficiencies in statutory and regulatory compliance and does not affect the validity of any transactions or agreements between the bank and its customers. Additionally, the penalty is imposed without prejudice to any other actions that the Reserve Bank of IndiaI may initiate against the bank.
