Reserve Bank Penalty on Citibank: Compliance Breach

The Reserve Bank of India imposed a Rs 3.20 lakh penalty on Citibank for not conducting due diligence on inward remittances from a foreign account. A show cause notice was issued, and after reviewing Citibank's responses, the Reserve Bank concluded the breaches were valid and warranted penalization.

The Reserve Bank of India has levied a Rs 3.20 lakh fine on Citibank due to lapses in due diligence regarding inward remittances from a foreign currency account, according to an announcement on Wednesday.

In its statement, the central bank disclosed that a show cause notice had been issued to Citibank. In response, the bank presented a written defense and made an oral presentation of its stance.

After examining the evidence and the bank's replies, the Reserve Bank determined the breaches were valid and justified the penalty. The central bank further clarified that this action does not affect the legitimacy of any transactions or agreements between Citibank and its customers.

(With inputs from agencies.)