RBI Fines HSBC Rs 29.6 Lakh for Credit Card Rule Violations
The Reserve Bank of India fined HSBC Rs 29.6 lakh for not following credit card regulations.
The Reserve Bank of India (RBI) has fined The Hong Kong and Shanghai Banking Corporation Limited (HSBC) Rs 29.6 lakh. This penalty is for not following rules related to credit cards, debit cards, and prepaid co-branded cards.
The RBI inspected HSBC’s financial records as of March 31, 2022, and found that the bank did not comply with certain directions. After identifying these issues, the RBI sent a notice to HSBC, asking why they should not be penalized for their failure to follow the rules.
HSBC responded to the notice and also made oral submissions during a personal hearing. Despite these efforts, the RBI concluded that HSBC was indeed at fault. The main issue was that HSBC did not ensure there was no negative amortization while calculating the Minimum Payment Due on some credit card accounts. “The bank failed to ensure that there was no negative amortization while computing Minimum Payment Due in certain credit card accounts,” said the RBI.
The RBI clarified that the penalty is for regulatory and compliance issues and does not question any transactions or agreements between HSBC and its customers. Additionally, this penalty does not prevent the RBI from taking further actions against the bank if necessary.
