The Reserve Bank of India has slapped penalties on HDFC Bank and Punjab & Sind Bank for deficiencies in regulatory compliance.

A penalty of Rs 75 lakh on HDFC Bank has been imposed for non-compliance with the RBI’s 'Know Your Customer' (KYC) guidelines.

The central bank took this step after conducting a statutory inspection of the bank with reference to its financial position as on March 31, 2023.

Among other things, HDFC Bank had not categorised certain customers into low, medium or high risk categories based on its assessment and risk perception, which is mandatory as per the RBI directives.

The RBI also imposed a penalty of Rs 68.20 lakh on Punjab & Sind Bank for non-compliance with certain directions on 'Creation of a Central Repository of Large Common Exposures - Across Banks' and 'Financial Inclusion - Access to Banking Services - Basic Savings Bank Deposit Account (BSBDA)'.

According to the RBI, the bank did not report certain borrowers with non-fund based exposure of Rs 5 crore and above to CRILC. Further, the bank allowed certain BSBDA holders to open savings bank deposit accounts.

KLM Axiva Finvest was fined Rs 10 lakh for non-compliance with requirements relating to declaration of dividends.

In all cases, the RBI said the penalties are based on deficiencies in regulatory compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their customers.