**Executive Summary**
This press release, dated November 28, 2025, announces that the Reserve Bank of India (RBI) has imposed a monetary penalty of ₹91.00 lakh on HDFC Bank Limited. The penalty is for contravention of provisions of the Banking Regulation Act, 1949 and non-compliance with certain RBI directions, following a Statutory Inspection for Supervisory Evaluation (ISE 2024) conducted with reference to its financial position as on March 31, 2024. The order was issued on November 18, 2025.
**Key Points / Main Content**
* **Monetary Penalty:**
* RBI imposed a monetary penalty of ₹91.00 lakh on HDFC Bank Limited.
* **Reasons for Penalty:**
* Contravened provisions of section 19 (1)(a) read with section 6(1) of the Banking Regulation Act, 1949 (BR Act).
* Non-compliance with RBI directions on ‘Interest Rate on Advances’, ‘Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks’, and 'Know Your Customer (KYC)'.
* RBI found that HDFC Bank had adopted multiple benchmarks within the same loan category; a wholly owned subsidiary of the bank undertook business which is not a permissible business under Section 6 of the BR Act; the bank had outsourced the function of determining compliance with KYC norms of certain customers to its outsourcing agents.
* **Inspection and Notice:**
* RBI conducted a Statutory Inspection for Supervisory Evaluation (ISE 2024) of the bank with reference to its financial position as on March 31, 2024.
* A notice was issued to the bank, advising it to show cause as to why penalty should not be imposed.
* **Disclaimer:**
* The action is based on deficiencies in statutory and regulatory compliance.
* It is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
* The penalty is without prejudice to any other action that may be initiated by RBI against the bank.
**Impact Analysis**
**HDFC Bank Limited**
* **Impact:** Faces a monetary penalty of ₹91.00 lakh and potential reputational damage due to non-compliance.
* **Action Required:** Must pay the penalty and address the deficiencies identified by the RBI to ensure future compliance with regulations and directions.
**RBI**
* **Impact:** Further strengthens the need to scrutinize banking governance and compliance.
* **Action Required:** Enforce regulatory compliance and take appropriate actions against entities failing to meet the required standards.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator that imposed the monetary penalty.
Banking Regulation Act, 1949 (BR Act): The act under which the penalty was imposed and compliance was assessed.
HDFC Bank Limited: The bank on which the monetary penalty was imposed.
Know Your Customer (KYC): The bank had outsourced the function of determining compliance with KYC norms of certain customers to its outsourcing agents
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व ब ैंक
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
November 28, 2025
RBI imposes monetary penalty on HDFC Bank Limited
The Reserve Bank of India (RBI) has, by an order dated November 18, 2025,
imposed a monetary penalty of ₹91.00 lakh (Rupees Ninety One lakh only) on HDFC
Bank Limited (the bank) for contravention of provisions of section 19 (1)(a) read with
section 6(1) of the Banking Regulation Act, 1949 (BR Act) and non-compliance with
certain directions issued by RBI on ‘Interest Rate on Advances’, ‘Guidelines on
Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks’
and ‘Know Your Customer (KYC)’ . This penalty has been imposed in exercise of
powers conferred on RBI under the provisions of section 47A(1)(c) read with section
46(4)(i) of the BR Act.
The Statutory Inspection for Supervisory Evaluation (ISE 2024) of the bank was
conducted by RBI with reference to its financial position as on March 31, 2024.
Based on supervisory findings of non-compliance with the provisions of BR Act, RBI
directions and related correspondence in that regard, a notice was issued to the bank
advising it to show cause as to why penalty should not be imposed on it for its failure
to comply with the said provisions of BR Act and RBI directions.
After considering the bank’s reply to the notice and additional submissions made
by it, RBI found that the following charges against the bank were sustained,
warranting imposition of monetary penalty:
i) The bank had adopted multiple benchmarks within the same loan category;
ii) A wholly owned subsidiary of the bank undertook business which is not a
permissible business that can be undertaken by a banking company under
Section 6 of the BR Act; and
iii) The bank had outsourced the function of determining compliance with KYC
norms of certain customers to its outsourcing agents.
This action is based on deficiencies in statutory and 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, imposition of monetary penalty is without
prejudice to any other action that may be initiated by RBI against the bank.
(Brij Raj)
Press Release: 2025-2026/1580 Chief General Manager