According to an RBI press release, HDFC Bank, the country’s largest private sector lender, opened certain savings deposit accounts in the name of eligible entities and gave gifts in the form of paying the first-year premium for the complimentary life insurance cover, costing more than Rs 250 to the depositors at the time of accepting certain deposits. Additionally, the bank failed to ensure that customers are not contacted after 7 pm and before 7 am.
The RBI had conducted a statutory inspection of the bank with reference to its financial position as of March 31, 2022, based on supervisory findings of non-compliance with the central bank’s directions.
Consequently, the RBI issued a notice to the bank advising it to show cause as to why a penalty should not be imposed on it for its failure to comply with the directions. After considering the bank’s reply to the notice, additional submissions made by it, and oral submissions made during the personal hearing, the RBI decided that the charges against the bank were sustained, warranting the imposition of a monetary penalty.
Meanwhile, the RBI, during its statutory inspection, found that Axis Bank – the third largest private sector lender – had opened certain savings deposit accounts in the name of ineligible entities; allotted multiple customer identification codes to certain customers instead of a Unique Customer Identification Code (UCIC) for each customer; and obtained collateral security for agricultural loans up to Rs 1.60 lakh in certain cases.
Additionally, the bank’s wholly owned subsidiary undertook business as a technology service provider, which is not a permissible business that can be undertaken by a banking company under Section 6 of the Banking Regulation Act, the RBI highlighted.
First Published: Sep 10 2024 | 7:40 PM IST
