New Delhi: HDFC Bank, the country's largest private bank, has been fined Rs 10 crore. The Reserve Bank of India (RBI) issued its order on Friday taking major action on violation of banking rules. Investigations by the central bank found several irregularities in the car/auto loan portfolio of the HDFC Bank. A whistle blower had complained to RBI in this regard. The central bank examined documents in the case of selling and marketing a third-party non-financial product to its customers of the HDFC Bank and found it to be in violation of banking rules.
RBI in its investigation found the case to be in violation of Section 8 and Section 6(2) of the Banking Regulation Act, 1949. He issued a show cause notice to the HDFC Bank asking why he should not be fined. In this case, the Reserve Bank considered response to the notice of the HDFC Bank and oral statementduring the hearing. He also looked at the clarifications and documents given by the bank but after not being satisfied he has imposed a fine of Rs 10 crore on the HDFC Bank.
RBI regulates the banking system in the country. In such a case, the Reserve Bank has the right to take action and impose penalty on the bank under Section 47A(1)(c) and Section 46(4)(i) of the Banking Regulation Act, 1949 for violating banking rules. HDFC Bank is the largest private bank in the country. It is headquartered in Mumbai, Maharashtra. On this BSE in the stock markets, it is among the 30 Sensex companies. It has about 1.20 lakh employees and close to 5,500 branches.