RBI Imposes Penalty For Rs 29.60 lakh On HSBC Bank For Non-Compliance With Card Operations Regulations
The Reserve Bank of India (RBI) recently announced the imposition of a monetary penalty amounting to Rs 29.60 lakh on HSBC Bank stating non-compliance with regulatory directives concerning credit card, debit card, and rupee denominated co-branded prepaid card operations.
According to the RBI's statement released on June 28, HSBC Bank failed to adhere to specific directions outlined in the "Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022". These directions states measures for ensuring operational transparency and customer protection within the banking sector. Such as an adequate system to track the use of money.
The bank neglected to prevent negative amortisation when computing minimum payment due for certain credit card accounts.
The penalty follows Statutory Inspection for Supervisory Evaluation (ISE 2022), conducted to assess the bank's compliance status. Upon identifying significant discrepancies in adherence to regulatory guidelines, the RBI issued a notice to HSBC Bank.
In response, HSBC Bank submitted its defense, including oral submissions during a personal hearing and additional written submissions. However, RBI rejected the arguments advanced by HSBC Bank and imposed a penalty of Rs 29.60 lakh.