RBI imposes monetary penalty on Authorised Dealer Bank – Citibank N.A.
Case Brief
The Reserve Bank of India imposed a monetary penalty on Citibank N.A. under Section 11(3) of FEMA, 1999. The penalty was for contravention of RBI directions concerning reporting of transactions undertaken under the Liberalized Remittance Scheme. RBI issued a show-cause notice, considered the bank’s written reply and oral submissions, and concluded that the contraventions were substantiated and warranted penalty.
RBI imposed a monetary penalty under Section 11(3) of FEMA, 1999 after finding that Citibank N.A. contravened directions issued by the Reserve Bank of India relating to reporting of transactions undertaken under the Liberalized Remittance Scheme (LRS). The bank had received a show-cause notice, submitted a written reply, and made oral submissions at a personal hearing, but the contraventions were held to be substantiated and warranted penalty.
Severity Assessment
The action is a monetary penalty of Rs 36.28 lakh, which falls in the highest monetary band used here (> Rs 20 lakh).
Citibank N.A. must absorb the monetary penalty and address the compliance deficiencies identified by RBI, particularly in reporting of LRS transactions. The action has no stated restriction on ongoing business operations, but it signals continued regulatory scrutiny of the bank’s reporting controls.
Published as Citibank N.A.
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