Citi Bank NA

RBI imposed penalties under Section 47A(1)(b) read with Section 46(4)(i) of the Banking Regulation Act, 1949 on 19 commercial banks after finding violations of RBI instructions relating to derivatives. The contraventions included failure to carry out due diligence regarding suitability of products, selling derivative products to users who did not have risk management policies, and not verifying the underlying/adequacy of underlying and eligible limits under the past performance route. RBI had issued show-cause notices, considered written replies and oral submissions, and concluded that the violations were established, leading to the penalties.

Each of the 19 named banks must absorb the monetary penalty and address the compliance gaps identified by RBI. The action does not impose an ongoing operational restriction, but it signals scrutiny over derivatives sales, suitability checks, and underlying verification controls.