The Reserve Bank of India has imposed monetary penalties onIDBI Bank Limited and Citibank under the Foreign Exchange Management Act (FEMA). it said in a statement on Friday.
The RBI has levied a penalty of Rs 36.30 lakh on IDBI Bank Limited 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.
The RBI had issued a show cause notice, 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 country’s apex bank concluded that the violations were substantiated and warranted the imposition of a penalty.
The action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
The RBI also imposed a monetary penalty of Rs 36.28 lakh on Citibank N.A. for contravening its directions related to reporting of transactions undertaken under the Liberalized Remittance Scheme.
The RBI had issued a show cause notice, in response to which the bank submitted a written reply and also made oral submissions during a personal hearing thereon.
After considering the facts of the case and the bank’s reply in the matter, the RBI concluded that the contraventions were substantiated and warranted imposition of penalty, under the FEMA, 1999, the RBI said in a statement.
