RBI Enforces Penalties on Citibank and IDBI Bank for Regulatory Lapses

The Reserve Bank of India penalized Citibank N.A. Rs 36.28 lakh for violations under the Liberalised Remittance Scheme and IDBI Bank Rs 36.30 lakh for lacking due diligence in foreign remittance processing. These penalties address regulatory compliance deficiencies, not the validity of specific transactions.

The Reserve Bank of India (RBI) has taken punitive action against Citibank N.A. and IDBI Bank for breaches in regulatory compliance. On Friday, the RBI announced imposing a fine of Rs 36.28 lakh on Citibank N.A. for contraventions related to the Liberalised Remittance Scheme.

Additionally, IDBI Bank Ltd faces a penalty of Rs 36.30 lakh for failing to conduct necessary due diligence on inward remittances from a constituent's foreign currency account. The RBI clarified that these fines are meant to address compliance shortcomings and are not assertions on the legality of transactions with clients.

This move underscores the central bank's ongoing scrutiny of financial institutions to uphold stringent standards in transaction reporting and due diligence processes.

(With inputs from agencies.)