New Delhi, Nov 28 (IANS) The Reserve Bank of India on Friday informed that it had imposed monetary penalties on HDFC Bank Limited and Mannakrishna Investments Private Limited for non-compliance with rules and directions.

The RBI said that it fined HDFC Bank Rs 91 lakh for breaches of section 19(1)(a), section 6(1) of the Banking Regulation Act, 1949 and non‑compliance with RBI directions on interest rates on advances, outsourcing of financial services and Know Your Customer norms.

A statutory inspection revealed that the bank had adopted multiple benchmarks within the same loan category.

A wholly owned subsidiary of the bank undertook business that is not a permissible business that can be undertaken by a banking company under Section 6 of the BR Act, the statement from the RBI said.

The central bank also found that the bank violated rules by outsourcing the function of determining compliance with KYC norms of certain customers to its outsourcing agents.

The RBI also imposed a penalty of Rs 3.10 lakh on Mannakrishna Investments for governance lapses by violating provisions in its Master Direction to Non-Banking Financial Company (NBFC).

The company had failed to take prior written permission of the RBI while appointing a director, resulting in a change in management on account of a change in more than 30 per cent of its directors, excluding independent directors.

The RBI said the actions on HDFC Bank and Mannakrishna Investments arise from deficiencies in regulatory compliance, and do not pronounce on the validity of any customer transactions.

In September, HDFC Bank’s branch in Dubai International Financial Centre, namely ‘DIFC branch’, was barred by the Dubai Financial Services Authority (DFSA) from onboarding or soliciting new clients.

The HDFC branch was also banned from soliciting, onboarding or engaging in any financial promotions with any new client.

–IANS

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