RBI Imposes Rs. 4.20 Lakh Penalty on HDB Financial Services for KYC Non-Compliance

RBI Imposes Rs. 4.20 Lakh Penalty on HDB Financial Services for KYC Non-Compliance

The Reserve Bank of India (RBI) issued an order dated October 01, 2025 to impose a penalty in powers given by Section 58G(1) and clause (b) read with clause (aa) of sub-section (5) of Section 58B of the Reserve Bank of India Act, 1934.

RBI levied monetary penalty of Rs. 4.20 lakh on HDB Financial Services Limited for non-compliance with few provisions of the Reserve Bank of India (Know Your Customer (KYC)) Directions, 2016.

The Reserve Bank of India (RBI) checked the company’s financial records for the year ending March 31, 2024. During the inspection, RBI found that the company did not follow some of its rules. Because of this, RBI sent the company a notice asking why it should not be fined for breaking those rules.

After considering the company’s written response, oral submissions during a personal hearing, and additional submissions, RBI confirmed one major issue that warranted a monetary penalty:

The company did not collect the PAN, an equivalent ID, or Form 60 for a few loan accounts given during the financial year 2023-24.

RBI clarified that this action is only about regulatory compliance and does not question the validity of any transactions or agreements made by the company. The penalty has been imposed without affecting any other actions that RBI may take against the company in the future.