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The Reserve Bank of India (RBI) said on Friday that it has imposed a monetary penalty of Rs 4.88 lakh on HDFC Bank and Rs 2.70 lakh on Shriram Finance after finding non-compliance with certain directions of the Central Bank.
The penalty on HDFC Bank was levied under the provisions of Section 11(3) of the Foreign Exchange Management Act (FEMA) after the private sector lender had ignored the ‘Master Direction – Foreign Investment in India’ while granting a term loan to its client, the Reserve Bank said in a statement.
“The RBI had issued a Show Cause Notice to the bank for the same, and in response to which HDFC Bank had submitted a written reply and had also made oral submissions thereon,” the statement read.
After considering the facts of the case and the response given by HDFC Bank in the matter, the RB concluded to impose a penalty.
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