HSBC penalised by India's central bank

The bank reported inaccurate credit information for several expired credit cards.

The Reserve Bank of India (RBI) pressed a monetary penalty of ₹1,73,75,000 on Hongkong and Shanghai Banking Corporation for the violation of Rule 20(1) of Credit Information Companies Rules, 2006 (CIC Rules).

The penalty has been levied by the RBI under the authority granted to it by the Credit Information Companies (Regulation) Act, 2005, specifically in accordance with section 25 (1) (iii) and section 23 (4).

The RBI said that the penalty is a result of the bank's failure to comply with regulatory standards and is not meant to pass judgment on the legality of any dealings or contracts between the bank and its clients.

RBI conducted an Inspection for Supevisory Evaluation (ISE) of the bank's financial position as of 31 March 2021. 

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During the evaluation, it was discovered that the bank provided inaccurate credit information for several expired credit cards with no dues to all four CICs, violating the CIC Rules. 

HSBC was then issued a notice to explain why penalties shouldn't be imposed for breaching these provisions.

RBI reviewed the bank's response to the notice and oral arguments presented during the personal hearing. After careful consideration, it was determined that the bank had indeed violated the CIC Rules, and as a result, a monetary penalty was imposed.