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The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹1,73,75,000 (Rupees one crore seventy-three lakh seventy-five thousand only) on The Hongkong and Shanghai Banking Corporation Limited (HSBC) for contravention of Rule 20(1) of the Credit Information Companies Rules, 2006 (CIC Rules).
The penalty was imposed under the powers conferred on RBI through Section 25(1)(iii) read with Section 23(4) of the Credit Information Companies (Regulation) Act, 2005, following findings of deficiencies in regulatory compliance. The action is not intended to question the validity of any transaction or agreement entered into by the bank with its customers.
Background:
The RBI conducted a Statutory Inspection for Supervisory Evaluation (ISE) of HSBC with reference to its financial position as on March 31, 2021. Examination of the Risk Assessment Report and related correspondences revealed that the bank furnished incorrect credit information for a number of expired credit cards with nil dues to all four Credit Information Companies (CICs), thereby violating the CIC Rules.
A notice was issued to HSBC, giving it an opportunity to show cause as to why the penalty should not be imposed. After considering the bank’s written response and oral submissions during a personal hearing, RBI concluded that the contravention was substantiated and warranted the monetary penalty.
[RBI]