Mumbai: The Reserve Bank of India (RBI) has imposed monetary penalties on Yes Bank Limited and Hinduja Housing Finance Limited for non-compliance with regulatory directions relating to corporate governance and Know Your Customer (KYC) norms. The central bank said the penalties were based on supervisory findings and do not affect the validity of transactions entered into by the entities with their customers.

Penalty on Hinduja Housing Finance

The RBI imposed a penalty of ₹1.80 lakh on Hinduja Housing Finance Limited for failing to obtain prior approval from the central bank before implementing a management change that resulted in more than 30 per cent change in directors, excluding independent directors.

According to the RBI, the company did not comply with regulatory requirements governing changes in management and board composition.

Yes Bank fined over KYC compliance

The central bank also imposed a penalty of ₹31.80 lakh on Yes Bank Limited for failing to establish a system to use the KYC Identifier assigned by the Central KYC Records Registry (CKYCR) while opening account-based relationships with customers.

The RBI said the lapse amounted to non-compliance with its directions relating to Know Your Customer (KYC) norms.

Based on supervisory inspections

The RBI stated that both penalties were imposed following supervisory inspections conducted with reference to the financial position of the entities as on March 31, 2025.

The central bank said the action was based solely on deficiencies in regulatory compliance identified during the inspections.

Customer transactions remain unaffected

Clarifying the scope of the action, the RBI said the penalties should not be construed as questioning the validity of any transactions or agreements entered into by either entity with their customers.

The central bank emphasised that the enforcement action relates only to compliance shortcomings and does not affect the rights or obligations of customers.

The RBI regularly undertakes supervisory inspections of regulated entities and initiates enforcement action wherever violations of regulatory guidelines are identified to strengthen governance and ensure adherence to banking and financial regulations.