RBI Imposes ₹3.2 Lakh Penalty on Citibank for FEMA Violation

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.