What changed

The Reserve Bank of India (RBI) has issued an order dated March 18, 2026, imposing a monetary penalty of ₹31.80 lakh on The Hongkong and Shanghai Banking Corporation Limited. This action stems from the bank's non-compliance with RBI directions concerning 'Inoperative Accounts / Unclaimed Deposits in Banks - Revised Instructions'. Specifically, the bank failed to host a searchable database of unclaimed deposits on its website and did not generate Unclaimed Deposits Reference Numbers (UDRN) for certain unclaimed deposits transferred to the Depositor Education and Awareness (DEA) Fund. The inspection that revealed these deficiencies was conducted with reference to the bank's financial position as of March 31, 2025.

This enforcement action highlights the critical need for banks to adhere strictly to RBI's directives on managing unclaimed deposits. Compliance officers at HSBC and other banking institutions should review their internal processes to ensure the existence and accessibility of searchable databases for unclaimed deposits and the correct assignment of UDRNs. Failure to comply can result in significant monetary penalties, as demonstrated in this case. The RBI's action is based on regulatory deficiencies and does not affect the validity of customer transactions, but it underscores the importance of robust compliance frameworks for handling customer funds and regulatory reporting.

What to do next

Review and update procedures for managing inoperative accounts and unclaimed deposits.
Ensure a searchable database of unclaimed deposits is hosted on the bank's website.
Verify the generation and assignment of Unclaimed Deposits Reference Numbers (UDRN) for all relevant transfers to the DEA Fund.

Penalties

₹31.80 lakh

Source document (simplified)

Press Releases

| () | |
| Date : Mar 20, 2026 | |
| RBI imposes monetary penalty on The Hongkong and Shanghai Banking Corporation Limited | |
| | The Reserve Bank of India (RBI) has, by an order dated March 18, 2026, imposed a monetary penalty of ₹31.80 lakh (Rupees Thirty One Lakh Eighty Thousand only) on The Hongkong and Shanghai Banking Corporation Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Inoperative Accounts / Unclaimed Deposits in Banks - Revised Instructions’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of section 47 A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.

The statutory Inspection for Supervisory Evaluation of the bank was conducted by RBI with reference to its financial position as on March 31, 2025. Based on supervisory findings of non-compliance with the provisions of 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 RBI directions.

After considering the bank’s reply to the notice, additional submissions and oral submissions made during the personal hearing, RBI found that the following charges against the bank were sustained, warranting imposition of monetary penalty:

The bank did not (i) host a searchable database of unclaimed deposits on its website and (ii) generate and assign Unclaimed Deposits Reference Number (UDRN) to certain unclaimed deposits transferred to the "Depositor Education and Awareness" (DEA) Fund.

The action is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

(Brij Raj)
Chief General Manager

Press Release: 2025-2026/2296 | | The Reserve Bank of India (RBI) has, by an order dated March 18, 2026, imposed a monetary penalty of ₹31.80 lakh (Rupees Thirty One Lakh Eighty Thousand only) on The Hongkong and Shanghai Banking Corporation Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Inoperative Accounts / Unclaimed Deposits in Banks - Revised Instructions’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of section 47 A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.

The statutory Inspection for Supervisory Evaluation of the bank was conducted by RBI with reference to its financial position as on March 31, 2025. Based on supervisory findings of non-compliance with the provisions of 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 RBI directions.

After considering the bank’s reply to the notice, additional submissions and oral submissions made during the personal hearing, RBI found that the following charges against the bank were sustained, warranting imposition of monetary penalty:

The bank did not (i) host a searchable database of unclaimed deposits on its website and (ii) generate and assign Unclaimed Deposits Reference Number (UDRN) to certain unclaimed deposits transferred to the "Depositor Education and Awareness" (DEA) Fund.

The action is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

(Brij Raj)
Chief General Manager

Press Release: 2025-2026/2296 |
| The Reserve Bank of India (RBI) has, by an order dated March 18, 2026, imposed a monetary penalty of ₹31.80 lakh (Rupees Thirty One Lakh Eighty Thousand only) on The Hongkong and Shanghai Banking Corporation Limited (the bank) for non-compliance with certain directions issued by RBI on ‘Inoperative Accounts / Unclaimed Deposits in Banks - Revised Instructions’. This penalty has been imposed in exercise of powers conferred on RBI under the provisions of section 47 A(1)(c) read with section 46(4)(i) of the Banking Regulation Act, 1949.

The statutory Inspection for Supervisory Evaluation of the bank was conducted by RBI with reference to its financial position as on March 31, 2025. Based on supervisory findings of non-compliance with the provisions of 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 RBI directions.

After considering the bank’s reply to the notice, additional submissions and oral submissions made during the personal hearing, RBI found that the following charges against the bank were sustained, warranting imposition of monetary penalty:

The bank did not (i) host a searchable database of unclaimed deposits on its website and (ii) generate and assign Unclaimed Deposits Reference Number (UDRN) to certain unclaimed deposits transferred to the "Depositor Education and Awareness" (DEA) Fund.

The action is based on deficiencies in statutory and regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers. Further, imposition of monetary penalty is without prejudice to any other action that may be initiated by RBI against the bank.

(Brij Raj)
Chief General Manager

Press Release: 2025-2026/2296 | |