Mumbai: The Reserve Bank of India (RBI) has imposed a monetary penalty of Rs 66.6 lakh on The Hongkong and Shanghai Banking Corporation Limited (HSBC) for non-compliance with several regulatory directives, including those related to Know Your Customer (KYC) norms and Interest Rates on Deposits. Additionally, a fine of Rs 33.1 lakh has been levied on IIFL Samasta Finance Limited for failing to adhere to provisions outlined under the Non-Banking Financial Company – Systemically Important Non-Deposit Taking Company and Deposit Taking Company (Reserve Bank) Directions, 2016, along with KYC-related guidelines.
According to the RBI, these penalties were imposed due to deficiencies in regulatory compliance detected in both entities. However, the central bank clarified that the fines are not intended to question the validity of any transactions or agreements between the penalized institutions and their customers. The RBI regularly conducts compliance reviews to ensure financial institutions adhere to its prescribed guidelines, particularly regarding KYC norms, which are crucial in preventing money laundering and financial fraud. Interest rate regulations are also closely monitored to maintain transparency and fairness in banking operations.
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In HSBC’s case, the RBI found multiple instances of non-compliance with regulatory directions, prompting the imposition of the penalty. Similarly, IIFL Samasta Finance was found to have violated specific provisions governing systemically important non-banking financial companies (NBFCs). The central bank’s action highlights its strict approach toward enforcing regulatory compliance within the banking and financial sectors. Financial institutions are expected to maintain stringent internal control measures to prevent such breaches and ensure adherence to RBI’s operational guidelines.
Both HSBC and IIFL Samasta Finance are yet to respond publicly to the penalties imposed. Meanwhile, the RBI continues its supervisory vigilance to uphold financial stability and consumer protection in the banking and NBFC sectors.