MUMBAI: The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹4.88 lakh on HDFC Bank Ltd and ₹2.70 lakh on Shriram Finance Limited for separate breaches of regulatory compliance. The penalties come amid the RBI’s ongoing efforts to ensure strict adherence to financial norms by regulated entities.
HDFC Bank Penalised Over Foreign Investment Norms
The penalty on HDFC Bank, an authorised dealer bank, stems from a contravention of RBI regulations concerning foreign investment while sanctioning a term loan to a client. The central bank issued a show cause notice to HDFC Bank, to which the bank responded in writing and through oral submissions.
“After considering the facts of the case and the response given by HDFC Bank Ltd, the Reserve Bank of India concluded that the contraventions were established and warranted the imposition of a penalty,” the RBI said in its official release.
Shriram Finance Fined for Digital Lending Direction Violations
Shriram Finance Limited has been penalised for non-compliance with provisions under the “Reserve Bank of India (Digital Lending) Directions, 2025.” The findings were part of a statutory inspection of the company’s financials as of March 31, 2024.
According to the RBI, the company allowed loan repayments to be routed through a third-party account instead of ensuring direct credit to the company’s account from the borrowers — a clear breach of the lending norms. After reviewing the company’s written reply, supplementary submissions, and oral hearing, the RBI concluded the violation was substantiated.
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RBI Clarifies Nature of Penalties
The RBI stressed that the penalties imposed are strictly due to deficiencies in regulatory compliance and are not a verdict on the validity of any transaction or agreement made by the companies with their customers. The action reflects the regulator’s stance on governance, transparency, and financial discipline.
Both institutions remain under scrutiny as the RBI enhances its monitoring of compliance with banking and digital lending norms
About the Author – Sahhil Taware is a B.Sc. LL.B. (Hons.) student at National Forensic Sciences University, Gandhinagar, with a keen interest in corporate law and tech-driven legal change.