Context:
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹3.20 lakh on Citibank N.A.
- Reason: Failure to conduct due diligence while processing inward remittances.
- The remittances originated from a foreign currency account opened by a constituent.
Violation
- The bank was found in contravention of the Foreign Exchange Management Act (FEMA), 1999.
- RBI cited non-compliance with regulatory obligations related to KYC and transaction scrutiny.
RBI’s Statement
- The penalty is administrative in nature.
- It is intended to ensure compliance enforcement and does not impact the validity of any transactions or agreements with Citibank customers.
