RBI Imposes Rs 75 Lakh Fine on HDFC Bank for KYC Breach

On March 26, 2025, the Reserve Bank of India (RBI) imposed a monetary penalty of Rs 75 lakh on HDFC Bank for non-compliance with Know Your Customer (KYC) regulations. The penalty is part of a broader regulatory crackdown that also saw Punjab & Sind Bank and KLM Axiva Finvest fined for various compliance deficiencies.

HDFC Bank's KYC Violations

HDFC Bank was found to have breached KYC norms by not categorizing customers into low, medium, or high-risk categories based on risk perception. Additionally, the bank issued multiple customer identification codes to certain customers instead of a unique code for each customer. These findings emerged from a supervisory inspection of the bank's financial position as of March 31, 2023.

Punjab & Sind Bank faced a penalty of Rs 68.20 lakh for non-compliance with the Central Repository of Information on Large Credits (CRILC) rules. The bank failed to report certain borrowers with non-fund-based exposure of Rs 5 crore and above to CRILC and allowed customers in the basic savings category to open savings bank deposit accounts, violating Basic Savings Bank Deposit Account (BSBDA) rules.

KLM Axiva Finvest was penalized Rs 10 lakh for not adhering to the 'Declaration of Dividends' rules specified under the scale-based regulation for non-bank financial companies. The company declared a dividend for the financial year 2023-24 despite not meeting the minimum prudential requirements in each of the last three financial years.

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