The Reserve Bank of India (RBI) has imposed a fine of Rs 29.6 lakh on Hong Kong and Shanghai Banking Corporation Limited (HSBC) for not following some card related instructions. RBI said in a statement that this penalty has been imposed on HSBC for non-compliance of certain instructions issued by RBI on credit card, debit card and rupee denominated co-branded prepaid card operations of banks.
notice was issued
According to RBI, the statutory inspection (ISE 2022) was conducted by it for supervisory assessment of the financial position of the bank as on March 31, 2022. It was found that RBI instructions were not followed. A notice was issued to the Bank in that regard on the basis of relevant correspondence. The bank was asked to show cause and why penalty should not be imposed on it for failing to comply with the said instructions.
RBI was not satisfied with the answer
RBI said that after considering the bank’s response to the notice, oral reply given during personal appearance and additional information provided by it, it found that, inter alia, the allegations against the bank are proved for which monetary It was necessary to impose a fine. According to the statement, the bank failed to ensure that there was no negative amortization while calculating the minimum payment due in some credit card accounts.
Customers will not be affected
However, RBI said the penalty is based on deficiencies in statutory and regulatory compliance. It is not intended to call into question 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.
