RBI Penalises Citibank ₹3.20 Lakh for FEMA Contravention

Why in the news

The central bank fined a foreign bank for compliance failures on incoming foreign remittances.

Key facts

• Penalised entity: Citibank N.A.
• Amount: ₹3.20 lakh.
• Law: Foreign Exchange Management Act (FEMA), 1999.
• Reason: no proper due diligence on inward remittances that came from a foreign currency account opened by a constituent.

RBI’s clarification

• The penalty is administrative in nature.
• Its purpose is to enforce compliance.
• It has no bearing on the validity of any transaction or agreement with Citibank customers.

Exam angle

• Act involved: FEMA, 1999.
• Regulator: Reserve Bank of India.
• Areas flagged: KYC and transaction scrutiny.