Which two banks have been fined by the Reserve Bank of India (RBI) due to regulatory non-compliance in September 2024?

The correct answer is HDFC and Axis Bank.

Key Points

• In September 2024, the Reserve Bank of India (RBI) imposed monetary penalties on HDFC Bank and Axis Bank for regulatory non-compliance.
• The penalties were related to deficiencies in adhering to certain provisions of RBI guidelines concerning regulatory compliance.
• HDFC Bank was penalized for violating norms related to loan and credit card issuance policies as specified by RBI.
• Axis Bank faced action for non-compliance with Know Your Customer (KYC) norms and customer protection requirements.
• Such penalties are part of RBI's efforts to ensure strict adherence to banking regulations and safeguard customer interests.

Additional Information

• Reserve Bank of India (RBI)
  • The RBI is India's central banking institution, responsible for regulating the country's monetary policy and financial systems.
  • It was established on 1 April 1935, under the Reserve Bank of India Act, 1934.
  • Functions include regulating banks, issuing currency, and managing foreign exchange reserves.
• Regulatory Compliance in Banking
  • Banks are required to adhere to strict guidelines and policies issued by RBI, including KYC norms, lending practices, and data protection.
  • Non-compliance can lead to penalties, reputational damage, and operational restrictions.
• Know Your Customer (KYC)
  • KYC is a regulatory process to verify the identity of customers during account opening and transactions.
  • It helps prevent money laundering, fraud, and illegal financial activities.
• Customer Protection Norms
  • These norms ensure transparency, fairness, and protection of customer interests in banking operations.
  • RBI mandates banks to resolve complaints promptly and maintain customer confidentiality.