RBI Imposes HSBC Bank With Rs.29.60 Lakh Fine For Flouting Credit-Debit Card Directives
It was negligent in preventing negative amortization
By: : Ajay Singh
Update: 2024-06-30 08:00 GMT
RBI Imposes HSBC Bank With Rs.29.60 Lakh Fine For Flouting Credit-Debit Card Directives
It was negligent in preventing negative amortization
The Reserve Bank of India (RBI) has imposed a penalty of Rs 29.60 lakh on HSBC Bank for non-compliance with regulatory directives concerning credit cards, debit cards, and rupee-denominated co-branded prepaid card operations.
The RBI's statement read that HSBC Bank failed to adhere to the directions outlined in the ‘Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022.”
The directions state measures for ensuring operational transparency and customer protection within the banking sector, including a system to track money usage.
The bank neglected to prevent negative amortization when computing the minimum payment due for certain credit card accounts. The RBI issued a notice to the bank on identifying significant discrepancies in adherence to regulatory guidelines.
The penalty followed the Statutory Inspection for Supervisory Evaluation (ISE 2022), conducted to assess the bank's compliance status.
In its defence, HSBC Bank made oral submissions during a personal hearing and additional written clarifications, which were rejected by the banking regulator.