RBI Cracks Down: HDFC Bank, Punjab & Sind Bank, and KLM Axiva Finvest Penalized for Regulatory Non-Compliance
The Reserve Bank of India (RBI) imposed fines against KLM Axiva Finvest, Punjab & Sind Bank, and HDFC Bank on March 26, 2025, for noncompliance with regulations. The penalties were levied because some RBI directions were not followed, especially those pertaining to banking regulations, financial inclusion, and Know Your Customer (KYC).
Separate announcements detailing the penalties levied against the three financial organizations and their justifications were released by the Reserve Bank of India.
HDFC Bank – ₹75 Lakh Penalty
HDFC Bank has been fined ₹75 lakh by the RBI for failing to comply with its Know Your Customer (KYC) regulations. KYC regulations are essential for preserving banking operations’ transparency and deterring fraudulent activities like identity theft and money laundering.
HDFC Bank was found to have violated some KYC standards; the penalty emphasizes how crucial it is to follow RBI’s regulatory norms.
Punjab & Sind Bank – ₹68.20 Lakh Penalty
Punjab & Sind Bank received a penalty of ₹68.20 lakh from the RBI for failing to comply with certain banking regulations. Violations include:
Failure to meet the ‘Creation of a Central Repository of Large Common Exposures – Across Banks’ requirement. This directive ensures that banks maintain transparency in large corporate exposures, thereby lowering financial risks.
Failure to comply with the ‘Financial Inclusion – Access to Banking Services – Basic Savings Bank Deposit Account (BSBDA)’. The RBI’s financial inclusion rules aim to encourage universal banking access for all areas of society, particularly economically weaker segments.
KLM Axiva Finvest – ₹10 Lakh Penalty
KLM Axiva Finvest, a non-banking financial company (NBFC), received a ₹10 lakh penalty for failing to comply with RBI’s dividend disclosure criteria. To ensure financial stability and compliance with the central bank’s prudential requirements, NBFCs must adhere to specified dividend distribution standards.
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