RBI imposes penalty of Rs 29.60 lakh on HSBC Bank for not following directions on credit, debit cards

The Reserve Bank of India (RBI) has, by an order dated June 24, 2024, imposed a monetary penalty of Rs 29.60 lakh on The Hongkong and Shanghai Banking Corporation Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Credit Card, Debit Card and Rupee Denominated Co-branded Pre-paid Card operations of Banks’ reiterated in ‘Reserve Bank of India (Credit Card and Debit Card – Issuance and Conduct) Directions, 2022’.

This penalty has been imposed in exercise of powers vested in RBI conferred under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, the central bank said in a note on Friday.

The Statutory Inspection for Supervisory Evaluation (ISE 2022) of the bank was conducted by RBI 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.

The RBI said HSBC Bank failed to ensure that there was no negative amortisation while computing Minimum Payment Due in certain credit card accounts.