The Reserve Bank of India (RBI) fined the Hongkong and Shanghai Banking Corporation Ltd (HSBC Bank) Rs 1.73 crore for violating the Credit Information Companies (CIC) Rules, 2006. According to the RBI, during its examination of the bank’s Risk Assessment Report and related correspondence, it was discovered that the bank had violated these rules.
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- HSBC Bank has been fined Rs 1.73 crore by the Reserve Bank of India (RBI) for violating the Credit Information Companies Rules, 2006.
- The RBI discovered that HSBC had provided inaccurate credit information on expired credit cards with nil dues to all four Credit Information Companies.
- After issuing a notice, the RBI examined the bank’s reply and oral submissions made during the hearing and concluded that HSBC had contravened the CIC Rules, thereby warranting the monetary penalty.
- The RBI clarified that the action was taken only to address regulatory compliance deficiencies and did not impact the validity of any transaction or agreement between the bank and its customers.
- In April, the RBI imposed penalties on four cooperative banks for not following various norms.
- The Tamil Nadu State Apex Co-operative Bank, located in Chennai, was charged with a penalty of Rs 16 lakh, while Baran Nagrik Sahkari Bank, located in Rajasthan, was charged Rs 2 lakh for not following certain norms.
- The other two cooperative banks were also charged with penalties totaling Rs 26 lakh.
- The RBI’s action was intended to ensure regulatory compliance among banks and to maintain the stability of the Indian banking system.
About HSBC Bank
- HSBC Bank, also known as the Hongkong and Shanghai Banking Corporation Limited, is a global banking and financial services company headquartered in London, United Kingdom.
- HSBC Bank was established in 1865 in Hong Kong which was then a British colony.
- It is one of the largest banks in the world and operates in over 60 countries, providing services such as commercial banking, investment banking, wealth management, and more.
HSBC Bank in India
- HSBC Bank has a long history in India that dates back to 1853 when the Mercantile Bank of India was established in Mumbai.
- The bank has since expanded its offerings to include products and services for corporate and commercial banking clients as well as retail customers.
- By 1855, the Mercantile Bank had established offices in various locations including London, Chennai, Kolkata, Singapore, Hong Kong, Guangzhou, and Shanghai.
- In 1950, the bank moved into its new head office building at Flora Fountain in Mumbai.
- The Mercantile Bank was acquired by The Hongkong and Shanghai Banking Corporation Limited in 1959, which has been an international bank since its founding in 1865 to serve the needs of merchants on the China coast.
- HSBC in India has been instrumental in the development of the Indian banking industry and introduced India’s first ATM in 1987.
About Reserve Bank of India (RBI)
- The Reserve Bank of India (RBI) is the central bank of India, established on April 1, 1935, under the Reserve Bank of India Act, 1934.
- The RBI is responsible for regulating the monetary policy of the country, issuing currency notes, managing foreign exchange reserves, and ensuring the stability of the financial system.
- The RBI is headed by a governor and has a central board of directors appointed by the government of India.
- First RBI Governor – Sir Osborne Smith
- First India RBI Governor – Sir C.D. Deshmukh
- Current RBI Governor – Shaktikanta Das (Since December 2018)
- Its headquarters are located in Mumbai, Maharashtra.
- It has four regional offices and 19 sub-offices located across the country.
- The bank is also a member of the Asian Clearing Union, the Bank for International Settlements, and the International Monetary Fund.
- The primary objective of the RBI is to maintain price stability and support the economic growth of the country.
- It does this through various monetary policy tools such as open market operations, reserve ratios, and policy interest rates.
- The bank is also responsible for regulating and supervising the banking sector, including banks, non-banking financial institutions, and payment systems.
- The RBI manages India’s foreign exchange reserves, which are held in various currencies and invested in different assets such as gold, foreign government securities, and deposits with foreign central banks. The foreign exchange reserves serve as a cushion against external economic shocks and help maintain the value of the Indian rupee against other major currencies.
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