Mumbai: The RBI on Friday said it has imposed a penalty of Rs 29.6 lakh on Hong Kong and Shanghai Banking Corporation Limited (HSBC) for non-compliance with certain card-related instructions.
HSBC has been fined for non-compliance with certain directions issued by the Reserve Bank of India (RBI) on 'credit card, debit card and rupee denominated co-branded pre-paid card operations of banks', the central bank said. a statement.
The RBI said a statutory inspection was conducted for supervisory assessment (ISE 2022) of the bank with reference to its financial position as of March 31, 2022.
Based on supervisory findings of non-compliance with RBI instructions and related correspondence in that regard, a notice was issued to the Bank advising it to show cause that penalty would be imposed on it for failure to comply with the said instructions. Why should it not be imposed?
After considering the bank's reply to the notice, the oral arguments made during the personal hearing and additional submissions made by it, the RBI said that it inter alia found that the allegations against the bank were sustained, Due to which it has become necessary to impose monetary penalty.
"The bank failed to ensure that there was no negative amortization while calculating the minimum payment due in certain credit card accounts," it said.
However, RBI said the penalty is based on deficiencies in statutory and regulatory compliance and is not intended to affect the validity of any transaction or agreement entered into by the bank with its customers.
Further, the imposition of monetary penalty will not have any adverse effect on any other action initiated by the RBI against the bank.
HSBC has been fined for non-compliance with certain directions issued by the Reserve Bank of India (RBI) on 'credit card, debit card and rupee denominated co-branded pre-paid card operations of banks', the central bank said. a statement.
The RBI said a statutory inspection was conducted for supervisory assessment (ISE 2022) of the bank with reference to its financial position as of March 31, 2022.
Based on supervisory findings of non-compliance with RBI instructions and related correspondence in that regard, a notice was issued to the Bank advising it to show cause that penalty would be imposed on it for failure to comply with the said instructions. Why should it not be imposed?
After considering the bank's reply to the notice, the oral arguments made during the personal hearing and additional submissions made by it, the RBI said that it inter alia found that the allegations against the bank were sustained, Due to which it has become necessary to impose monetary penalty.
"The bank failed to ensure that there was no negative amortization while calculating the minimum payment due in certain credit card accounts," it said.
However, RBI said the penalty is based on deficiencies in statutory and regulatory compliance and is not intended to affect the validity of any transaction or agreement entered into by the bank with its customers.
Further, the imposition of monetary penalty will not have any adverse effect on any other action initiated by the RBI against the bank.
