The Reserve Bank of India (RBI) has imposed a monetary penalty of 75 lakh on HDFC Bank Limited for failing to comply with certain regulatory guidelines related to Know Your Customer (KYC) norms. The penalty was issued through an order dated March 24, 2025.
The action follows RBI’s Statutory Inspection for Supervisory Evaluation (ISE 2023) of HDFC Bank, conducted with reference to its financial position as of March 31, 2023. The inspection revealed non-compliance with RBI’s KYC directives, prompting the central bank to issue a notice to HDFC Bank, asking it to justify why a penalty should not be levied.
Upon reviewing the bank’s response and additional submissions, RBI determined that two key violations were sustained:
1. Risk Categorization Lapses – The bank failed to classify certain customers into low, medium, or high-risk categories based on its assessment and risk perception.
2. Duplicate Customer Identification Codes– Instead of assigning a Unique Customer Identification Code (UCIC) to each customer, the bank allotted multiple identification codes to certain customers.
RBI clarified that the penalty was imposed due to deficiencies in regulatory compliance and does not impact the validity of any customer transactions or agreements with the bank. Furthermore, the central bank stated that the imposition of this penalty does not preclude any further action that may be taken against HDFC Bank.
This move highlights RBI’s stringent approach to enforcing compliance with KYC norms, which are crucial for preventing financial fraud and maintaining transparency in banking operations.
