The RBI on Friday imposed a fine of Rs 29.6 lakh on Hongkong and Shanghai Banking Corporation Limited (HSBC) for not following certain card-related instructions.
RBI Credit Cards Rule: RBI on Friday imposed a fine of Rs 29.6 lakh on Hong Kong and Shanghai Banking Corporation Limited (HSBC) for not following certain instructions related to cards. The central bank said in a statement that this fine has been imposed on HSBC for not following certain instructions issued by the Reserve Bank of India (RBI) on “banks’ credit cards, debit cards and rupee denominated co-branded prepaid card operations”.
According to RBI, statutory inspection (ISE 2022) was conducted by it for supervisory evaluation with reference to the financial position of the bank as on March 31, 2022. It was found that RBI’s instructions were not followed. A notice was issued to the bank on the basis of the relevant correspondence in that regard. In it, the bank was asked to give reasons and asked why a penalty should not be imposed on it for failing to comply with the said instructions.
RBI said that after considering the bank’s reply to the notice, oral reply given during 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, RBI said that this fine 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 fine will not have any adverse effect on any other action initiated by RBI against the bank.
