RBI imposed a fine on this bank, people use its credit cards a lot, are you also its customer?
RBI on Friday imposed a fine of Rs 29.6 lakh (RBI Fine) on Hong Kong and Shanghai Banking Corporation Limited (HSBC) for not following some instructions related to the card.
RBI on Friday imposed a fine of Rs 29.6 lakh (RBI Fine) on Hong Kong and Shanghai Banking Corporation Limited (HSBC) for not following some instructions related to the card. The central bank said in a statement that this fine has been imposed on HSBC for not following some instructions issued by the Reserve Bank of India (RBI) on "banks' credit card, debit card, and rupee-denominated co-branded prepaid card operations".
According to RBI, statutory inspection (ISE 2022) was conducted by it for supervisory evaluation in respect of the financial position of the bank as of March 31, 2022. It found that the instructions of RBI were not followed. A notice was issued to the bank based on the relevant correspondence in that regard. In that, the bank was asked to give reasons and asked why it should not be fined for failing to comply with the said instructions.
The RBI said that after considering the bank's reply to the notice, oral reply given during a personal appearance, and additional information provided by it, it found that, among other things, the allegations against the bank are proved which required imposition of monetary penalty. It said, "The bank failed to ensure that there was no negative amortization while calculating the minimum payment due in some credit card accounts."
However, the RBI said that this penalty is based on deficiencies in statutory and regulatory compliance. Its purpose is not to question the validity of any transaction or agreement made by the bank with its customers. Apart from this, imposing a monetary penalty will not have any adverse effect on any other action to be initiated by RBI against the bank.
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