US based Citibank chastised by RBI for Rs 30 million amidst failure to comply with the directions issued

The United States based Citibank has become a prey to the Reserve Bank of India with the penalty imposed amounting to Rs 30 million for deficiencies in compliance with the RBI instructions on ‘Fit and Proper’ criteria for directors of banks. The RBI issued an order against the bank for it’s failure to adhere to the aforesaid directions issued as of 4th of January this year.

This penalty has been imposed in exercise of powers vested in RBI under the provisions of Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949, taking into account the failure of the bank to adhere to the aforesaid directions issued by RBI.

“This action is based on deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.”, reported the statement in relation.

In July 2013, the central bank had issued a “cautionary letter” to Citibank for violations of instructions regarding know-your-customer norms or anti-money laundering. The U.S.-based Citibank has been operating in India for over 115 years. The bank has 35 branches in India and a network of 541 ATMs, according to the latest RBI data.

Thsi marks the second case registered in the assessment year 2018-19. The State Bank of India had been penalised for Rs 4 millions on non-compliance with the directions issued by RBI on Detection and Impounding of Counterfeit Notes.

It is in year 2017 that the Central Bank of India had imposed a heavy penalty amounting to Rs 50 million on the Syndicate Bank (the bank) for non-compliance with the directions/guidelines issued by RBI on cheque purchase/discounting, bill discounting, and Know Your Customer (KYC)/Anti-Money Laundering (AML) norms.

Also the IDFC Bank Limited had been charged Rs 20 million monetary penalty on 24th of October 2017, for contravention of regulatory restrictions pertaining to loans and advances under section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.


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