The Reserve Bank of India (RBI) has imposed a penalty of Rs 91 lakh on HDFC Bank for deficiencies in statutory and regulatory compliance, including those related to Know Your Customer (KYC).

The private lender also did not comply with certain directions on interest rate on advances and outsourcing of financial services by banks.

RBI said the bank had used multiple benchmarks for the same loan category, allowed a subsidiary to carry out non-permitted business and outsourced KYC compliance checks to external agents.

RBI’s action follows a statutory inspection for supervisory evaluation of the bank’s financial position as on 31 March 2024.

After considering the bank’s reply to the notice and additional submissions made by it, RBI said the charges against the bank were sustained, warranting the imposition of a monetary penalty.

The central bank, however, said the penalty 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, it added.

In another statement, the RBI said a penalty of Rs 3.1 lakh has been imposed on Mannakrishna Investments for non-compliance with certain provisions of the ‘Master Direction – Reserve Bank of India (Non-Banking Financial Company - Scale Based Regulation) Directions, 2023’, relating to ‘Governance Issues’.