driven Image credit source: File photo
The RBI has imposed a fine of Rs 29.6 lakh on Hong Kong and Shanghai Banking Corporation Limited (HSBC) for not following certain instructions related to cards. The central bank said in a statement that this penalty was imposed on HSBC for non-compliance with certain instructions issued by the Reserve Bank of India (RBI) regarding banking operations using rupee-denominated credit cards, debit cards and co-branded prepaid cards.
What did the RBI say?
According to the RBI, it conducted the statutory inspection (ISE 2022) for supervisory assessment in the context of the bank’s financial condition as on March 31, 2022. It was found that the RBI’s instructions were not followed. In this regard, a notification was sent to the bank on the basis of relevant correspondence. It asked the bank to explain its reasons and asked why it should not be penalized for failing to comply with these instructions.
RBI said that after considering the bank’s reply to the notice, the oral reply given during personal appearance and the additional information furnished by it, it found that, inter alia, the allegations against the bank are proved for which it was necessary to impose monetary penalty. It said that the bank failed to ensure that there was no negative amortisation while calculating the minimum payment due on some credit card accounts.
read this too
Fine imposed for this.
However, the RBI said that this penalty is based on deficiencies in legal and regulatory compliance. It is not intended to question the validity of any transaction or agreement entered into by the bank with its customers. Moreover, the imposition of monetary penalty will not have any adverse effect on any other action initiated by the RBI against the bank.
