RBI imposes monetary penalty on Citibank N.A. worth Rs 3.20 lakh

The Reserve Bank of India has announced that it has imposed a monetary penalty of Rs 3,20,000/- (Rupees Three Lakhs Twenty Thousand only) on Citibank N.A. in exercise of powers vested in the Reserve Bank under the provisions of Section 11(3) of FEMA, 1999, for not undertaking due diligence while processing the inward remittances from a Foreign Currency Account opened by a constituent, resulting in contravention of Section 10 (4) of FEMA, 1999.

In the press release, the Reserve Bank of India had mentioned that it has issued a Show Cause Notice to the bank, in response to which the bank submitted a written reply and also made oral submissions thereon.

After considering the facts of the case and the bank’s reply in the matter, the Reserve Bank of India came to the conclusion that the violations were substantiated and warranted imposition of penalty.

Further, the bank has declared that this action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.