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The penalty has been imposed on HSBC for non-compliance with certain directions issued by Reserve Bank of India (RBI) on ‘Credit Card, Debit Card and Rupee Denominated Co-branded Pre-paid Card operations of Banks’, the central bank said in a statement.
RBI said a Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by it with reference to its financial position as on March 31, 2022.
Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to the bank advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions.
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“The bank failed to ensure that there was no negative amortisation while computing Minimum Payment Due in certain credit card accounts,” it said.
RBI, however, said the penalty is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transactions or agreement entered into by the bank with its customers.
Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.