**Executive Summary**
On October 01, 2025, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹4.20 lakh on HDB Financial Services Limited for non-compliance with certain provisions of the 'Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016'. The penalty was imposed following a statutory inspection with reference to the company's financial position as on March 31, 2024. The press release is dated October 03, 2025.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹4.20 lakh on HDB Financial Services Limited.
* The penalty is for non-compliance with certain provisions of the 'Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016'.
* The penalty is imposed under clause (b) of sub-section (1) of Section 58G read with clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934.
* **Inspection and Findings:**
* RBI conducted a statutory inspection of HDB Financial Services Limited with reference to its financial position as on March 31, 2024.
* The inspection revealed non-compliance with RBI directions.
* A notice was issued to the company to show cause as to why the penalty should not be imposed.
* The company failed to obtain Permanent Account Number (PAN) or equivalent e-document thereof or Form No. 60 in certain loan accounts disbursed during FY 2023-24.
* **Nature of Action:**
* The action is based on deficiencies in regulatory compliance.
* The action is not intended to pronounce upon the validity of any transaction or agreement entered into by the company.
* The monetary penalty is without prejudice to any other action that may be initiated by RBI.
**Impact Analysis**
**HDB Financial Services Limited Impact**
* *Impact:* Financial penalty of ₹4.20 lakh due to non-compliance with KYC directions.
* *Action Required:* HDB Financial Services Limited must address the identified deficiencies in regulatory compliance related to obtaining PAN or equivalent documents for loan accounts.
**Reserve Bank of India Impact**
* *Impact:* Enforcement of regulatory compliance and sending a clear message regarding the necessity for financial institutions to adhere to KYC regulations.
* *Action Required:* Monitor HDB Financial Services Limited's corrective actions and reserves the right to initiate further action if necessary.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator imposing the monetary penalty.
HDB Financial Services Ltd: The entity on which monetary penalty is imposed.
Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016: Directions for non-compliance of which penalty is imposed.
Section 58G: Section of the Reserve Bank of India Act, 1934 under which penalty is imposed.
Reserve Bank of India Act, 1934: The act under which RBI derives its power to impose the penalty.
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
October 03, 2025
RBI imposes monetary penalty on HDB Financial Services Ltd
The Reserve Bank of India (RBI) has, by an order dated October 01, 2025, imposed a
monetary penalty of ₹4.20 lakh (Rupees Four lakh twenty thousand only) on HDB Financial
Services Limited (the company) for non-compliance with certain provisions of the ‘Reserve
Bank of India (Know Your Customer (KYC)) Directions, 2016’ issued by RBI. This penalty
has been imposed in exercise of powers conferred on RBI under clause (b) of sub-section
(1) of Section 58G read with clause (aa) of sub-section (5) of Section 58B of the Reserve
Bank of India Act, 1934.
The statutory inspection of the company was conducted by RBI with reference to its
financial position as on March 31, 2024. Based on supervisory findings of non-compliance
with RBI directions and related correspondence in that regard, a notice was issued to the
company advising it to show cause as to why penalty should not be imposed on it for its
failure to comply with the said directions.
After considering the company’s reply to the notice, oral submissions made during the
personal hearing and additional submissions made by it, RBI found that the following
charge against the company was sustained, warranting imposition of monetary penalty:
The company failed to obtain Permanent Account Number (PAN) or equivalent e-
document thereof or Form No. 60 in certain loan accounts disbursed during FY 2023-24.
This action is based on deficiencies in regulatory compliance and is not intended to
pronounce upon the validity of any transaction or agreement entered into by the company.
Further, imposition of this monetary penalty is without prejudice to any other action that
may be initiated by RBI against the company.
(Brij Raj)
Press Release: 2025-2026/1243 Chief General Manager