Recorded RBI impact
Fine: Rs 36.4 L
Monetary penalty · Fresh imposition
Published by RBI
29 May 2024
Case Brief
The Reserve Bank of India imposed a penalty of ₹36,38,000 on The HSBC Limited under Section 11(3) of FEMA, 1999. RBI said the bank violated instructions on reporting requirements under the Liberalised Remittance Scheme of FEMA, 1999. After a show-cause notice, the bank submitted written and oral responses, but RBI held that the violations were substantiated and merited penalty. RBI clarified that the action concerns regulatory compliance deficiencies and does not assess the validity of any customer transaction or agreement.
Why RBI Acted
RBI imposed a monetary penalty under Section 11(3) of FEMA, 1999 on The HSBC Limited for violation of its instructions on reporting requirements under the Liberalised Remittance Scheme (LRS) of FEMA, 1999. The bank had been issued a show-cause notice, submitted a written reply and oral submissions, but RBI found the violations substantiated and warranting penalty. RBI also clarified that the action is based on deficiencies in regulatory compliance and does not pronounce on the validity of any transaction or agreement with customers.
Operating Impact
The bank must absorb the monetary penalty and address the underlying reporting-compliance weaknesses identified by RBI. The order has no stated restriction on banking operations, but it signals continued regulatory scrutiny of FEMA/LRS reporting compliance.
Regulatory Basis
- Section 11(3) of FEMA, 1999
Action Facts
- Primary Impact
- Fine: Rs 36.4 L
- Entities Affected
- 1
- Entity Role
- Primary
- Entity Type
- Bank