Mumbai: Banking regulator, Reserve Bank of India, on Tuesday was reported as having levied a fine of Rs 1 crore on HDFC Bank.
The regulator said that the action was taken over non reporting of frauds and non-compliance over other directions.
It said that the bank's customers such as importers submitted forged bill of entries for remitting foreign currency. The RBI said its further inspections revealed non-compliance issues on part of the bank.
In a circular placed on the website, the RBI said, "Examination in this regard revealed violations of RBI directions on 'KYC/AML norms' (know your customer/anti-money laundering)and on reporting of frauds."
The regulator also asked why a fine should not be imposed upon the bank for non-compliance with KYC and AML norms. A fine was imposed through an order last Thursday after considering HDFC Bank's reply, oral submissions made during the personal hearing and additional submission made, the apex bank said.
The penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, it said.
"This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers," the RBI said.
Meanwhile, the bank in its statement to the exchanges has said that it has "taken necessary measures to strengthen its internal control mechanisms so as to ensure that such incidents do not recur."