Reserve Bank of India has clarified that this action against IDBI Bank and Citibank N.A. is based on deficiencies in regulatory compliance and is not intended to question the validity of any transaction or agreement entered into by the bank with its customers.
Reserve Bank of India (RBI) has imposed a fine of Rs 36.3 lakh on IDBI Bank. The fine has been imposed under section 11(3) of FEMA, 1999. The bank is accused of violating section 10(4) of FEMA, 1999. IDBI Bank has informed the stock markets about the fine. The exchange filing said that the reason for the fine is not following due diligence in processing and allowing foreign exchange transactions related to 363 inward remittances received during the period from June 2016 to January 2023.
In this regard, RBI has said, “The Reserve Bank of India had issued a show cause notice to the bank, to which the bank gave a written reply and also made oral submissions on it. 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 there has been a violation of the rules and it is appropriate to impose a fine.”
Citibank N.A. which rule did he break
Apart from this, the Reserve Bank of India has imposed a fine of Rs 36.28 lakh on Citibank N.A. under the provisions of section 11(3) of FEMA, 1999. This fine has been imposed for violation of the instructions issued by RBI regarding reporting of transactions made under the Liberalized Remittance Scheme. The Reserve Bank of India had also issued a show cause notice to Citibank N.A. After this, the bank had submitted a written reply and made oral submissions during the personal hearing. After considering the facts of the case and the bank’s reply in the case, the Reserve Bank of India came to the conclusion that the violations have been proved and it is appropriate to impose a penalty under FEMA, 1999.
RBI has clarified that this action against IDBI Bank and Citibank N.A. is based on deficiencies in regulatory compliance and is not intended to question the validity of any transaction or agreement made by the bank with its customers. IDBI Bank has also said that this action of the central bank will not have any impact on its finances, operations or other activities.
