RBI Slaps Rs3.20 Lakh Penalty on Citibank for FEMA Violation
Moneylife Digital Team 10 April 2025
The Reserve Bank of India (RBI) has imposed a penalty of Rs3.20 lakh on Citibank NA for failing to exercise due diligence while processing inward remittances from a foreign currency account held by a client. This lapse led to a violation of the provisions under the Foreign Exchange Management Act (FEMA).
 
RBI had earlier issued Citibank a show-cause notice (SCN) regarding the contravention. In response, the lender submitted a written explanation and also presented oral arguments.
 
"After examining the case details along with the bank's submissions, the Reserve Bank concluded that the charges were substantiated and warranted the imposition of a penalty," the central bank stated.
 
RBI further clarified that this regulatory action is based on deficiencies in compliance and is not intended to question the validity of any transactions or agreements the Bank may have entered into with its customers.
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