**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, ordered on November 18, 2025, is due to contravention of the Banking Regulation Act, 1949 (BR Act) and non-compliance with certain RBI directives. The penalty resulted from an inspection conducted on March 31, 2024.
**Key Points / Main Content**
* **Penalty Imposition:**
* RBI imposed a monetary penalty of ₹91.00 lakh on HDFC Bank Limited.
* The order was issued on November 18, 2025.
* **Reasons for Penalty:**
* Contravention of section 19 (1)(a) read with section 6(1) of the BR Act.
* Non-compliance with RBI directives on:
* ‘Interest Rate on Advances'
* ‘Guidelines on Managing Risks and Code of Conduct in Outsourcing of Financial Services by banks'
* 'Know Your Customer (KYC)'
* **Basis of Penalty:**
* 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.
* RBI issued a notice to the bank to show cause as to why penalty should not be imposed for its failure to comply with the provisions of the BR Act and RBI directions.
* After considering the bank's reply, RBI found the following charges were sustained, warranting the penalty.
* Adoption of multiple benchmarks within the same loan category.
* A wholly owned subsidiary undertaking business not permissible for banking companies under Section 6 of the BR Act.
* Outsourcing the function of determining compliance with KYC norms to outsourcing agents.
* **Disclaimer:**
* The action is based on deficiencies in statutory and regulatory compliance.
* The penalty is without prejudice to any other action that may be initiated by RBI against the bank.
* It is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
**Impact Analysis**
**HDFC Bank Limited**
* **Impact**
* Financial impact due to the monetary penalty of ₹91.00 lakh.
* Reputational impact due to the regulatory action.
* Required to address the identified non-compliance issues related to interest rates, risk management, KYC, and outsourcing practices.
* **Action Required**
* Pay the monetary penalty.
* Review and rectify the identified non-compliance issues related to internal benchmarks, business activities of subsidiaries, and outsourcing of KYC compliance.
* Improve adherence to BR Act provisions and RBI directives to avoid future penalties.
**Customers of HDFC Bank Limited**
* **Impact**
* No direct impact on individual transactions or agreements with the bank.
* **Action Required**
* No specific action required.
**Reserve Bank of India (RBI)**
* **Impact**
* Maintains regulatory oversight and enforces compliance with banking regulations.
* Upholds the integrity and stability of the banking system.
* **Action Required**
* Monitor HDFC Bank's corrective actions to ensure compliance.
* May initiate further actions if non-compliance persists.
Key Entities Referenced
Reserve Bank of India (RBI): The regulator that imposed the monetary penalty.
Banking Regulation Act, 1949 (BR Act): The primary legislation under which the penalty was imposed.
HDFC Bank Limited: The bank on which the monetary penalty was imposed.
Know Your Customer (KYC): Directions related to KYC norms with which the bank did not comply.
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