Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty of ₹1 crore on HDFC Bank Limited by order dated January 29, 2020. The penalty was for non-compliance with RBI’s Master Direction on Know Your Customer, following supervisory scrutiny that found the bank had not exercised ongoing due diligence in 39 current accounts opened for IPO bidding and that transactions in those accounts were disproportionate to the declared income and profile of the customers. RBI stated the penalty was imposed under the Banking Regulation Act, 1949, and was based on regulatory compliance deficiencies rather than the validity of customer transactions.