On Wednesday, the RBI said that it has levied a penalty amount to the tune of Rs. 1 crore on HDFC Bank for not complying with its KYC norms.
On its website, in a press release, the central bank said, ""This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers".
Further as part of the observations established during the on-site inspection for Supervisory Evaluation of the bank undertaken by RBI for the financial year ended March 31, 2017, a scrutiny of as many as 39 current accounts opened by its customers was carried out. From the inquiry it was found that the private sector lender did not exercised ongoing due diligence in relation to those accounts.
"It was observed that the transactions effected in these current accounts were disproportionate to the declared income and profile of the customers," said RBI.
There on the apex bank has asked the bank to show cause why it should not be levying the penalty for non-compliance with the KYC ruling.