New Delhi: The Reserve Financial institution on Thursday imposed a penalty of INR 10 crore on HDFC bank for not complying with the regulatory tips on auto loans. The penalties have been imposed after an inspection carried out by the RBI on a whistleblower criticism concerning irregularities within the auto mortgage portfolio of the financial institution, the central financial institution mentioned in an announcement.
“RBI has imposed, by an order dated Could 27, 2021, a financial penalty of INR 10.00 crore (Rupees ten crore solely) on HDFC Financial institution Restricted (the financial institution) for contravention of provisions of part 6(2) and part 8 of the Banking Regulation Act, 1949 (the Act). This penalty has been imposed in train of powers vested in RBI underneath the provisions of Part 47A(1)(c) learn with Part 46(4)(i) of the Act,” RBI mentioned.
This motion relies on deficiencies in regulatory compliance and isn’t supposed to pronounce upon the validity of any transaction or settlement entered into by the financial institution with its clients, the central financial institution famous.
A discover was issued to the HDFC financial institution advising it to indicate trigger as to why penalty shouldn’t be imposed on it for such non-compliance with the instructions.
“After contemplating the financial institution’s reply to the present trigger discover, oral submissions made throughout the private listening to and examination of additional clarifications/paperwork furnished by the financial institution, RBI got here to the conclusion that the aforesaid cost of contravention of provisions of the Act was substantiated and warranted imposition of financial penalty,” the assertion added.