RBI Slaps Penalties on HDFC Bank and Shriram Finance

The Reserve Bank of India (RBI) has imposed penalties on HDFC Bank and Shriram Finance Limited for contravention of regulatory norms. HDFC Bank faces a fine of Rs 4.88 lakh for violations related to foreign investment in India while granting a term loan to a client. Shriram Finance has been penalized Rs 2.70 lakh for non-compliance with the RBI's Digital Lending Directions, 2025.

Details of the Penalties

The RBI issued show cause notices to both entities, which responded with written and oral submissions. After reviewing the cases, the RBI concluded that the violations warranted penalties. The penalties are based on regulatory compliance deficiencies and not on the validity of transactions with customers.

Shriram Finance's Additional Violation

Shriram Finance was found routing loan repayments through a third-party account instead of directly to the company's account, further violating RBI directives.