The RBI imposed a penalty of Rs 29.6 lakh on The Hong Kong and Shanghai Banking Corporation Limited (HSBC) on Friday for non-compliance with certain directions related to cards. The central bank said in a statement that the penalty has been imposed on HSBC for non-compliance with certain directions issued by the Reserve Bank of India (RBI) on ‘Credit Card, Debit Card and Rupee Denominated Co-branded Pre-paid Card operations of Banks’.

A Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by it with reference to its financial position as of March 31, 2022, said RBI.

A notice based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard was issued to the bank advising it to show cause as to why a 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 agreements entered into by the bank with its customers.

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