RBI imposes penalty on BNP Paribas, 3 others

Mumbai: The Reserve Bank of India on Friday said it has imposed a penalty of Rs 31.8 lakh on BNP Paribas (the bank) for certain deficiencies in statutory and regulatory compliance. The central bank has also imposed penalties on Hewlett Packard Financial Services (India), SMFG India Credit Company, and Muthoot Vehicle & Asset Finance for non-compliance with certain norms. In a statement, the RBI said the penalty has been imposed on the bank for non-compliance with certain directions issued by it on 'Interest Rate on Advances'. Giving details, it said the statutory inspection for Supervisory Evaluation of the bank was conducted by it with reference to its financial position as of March 31, 2023.

Based on supervisory findings of non-compliance with RBI directions and related correspondence in that regard, a notice was issued to BNP Paribas, advising it to show cause as to why penalty should not be imposed on it for its failure to comply with the said directions. After considering the bank's reply to the notice, additional submissions by it and oral submissions made during the personal hearing, the RBI said it found that the charge against the bank was sustained, warranting imposition of monetary penalty. "The bank failed to adopt uniform external benchmark within the same loan category in respect of certain loans," the central bank said.

In separate releases, the RBI said a penalty of Rs 10.40 lakh has been imposed on Hewlett Packard Financial Services (India) Private Limited, Rs 7.9 lakh on Muthoot Vehicle & Asset Finance Limited and Rs 23.1 lakh on SMFG India Credit Company Limited (formerly known as Fullerton India Credit Company Limited). The RBI, however, added the penalties are based on deficiencies in statutory and regulatory compliance and are not intended to pronounce upon the validity of any transaction or agreement entered into by the entities with their customers.