Case Brief
What Happened
The Reserve Bank of India imposed a monetary penalty on Citibank N.A. under Section 11(3) of FEMA, 1999. The bank was found to have failed to undertake due diligence while processing inward remittances from a Foreign Currency Account opened by a constituent, leading to contravention of Section 10(4) of FEMA, 1999. RBI said it had issued a show-cause notice, considered the bank’s written and oral submissions, and concluded that the violations were substantiated and justified the penalty. The release clarifies that the action does not pronounce on the validity of any transaction or agreement entered into by the bank with its customers.