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RBI Imposes ₹5.00 Crore Penalty on Citibank N.A. for Regulatory Violations and Non-Compliance

KYCRBI Imposes ₹5.00 Crore Penalty on Citibank N.A. for Regulatory Violations and Non-Compliance

On November 2, 2023, the Reserve Bank of India (RBI) imposed a ₹5.00 crore penalty on Citibank N.A. for violating Section 26A of the Banking Regulation Act, 1949, and non-compliance with various RBI directions related to risk management and KYC. The penalty is exercised under RBI’s powers outlined in the BR Act.

The penalty is based on the findings of the 2021 Statutory Inspection for Supervisory Evaluation (ISE), revealing the bank’s failure to credit the eligible amount to the Depositor Education and Awareness Fund within the stipulated time, payment of commission to certain staff, and outsourcing AML alert monitoring to a Group company. The penalty is not a judgment on the validity of specific transactions but addresses regulatory compliance deficiencies.

The RBI issued a notice to the bank, prompting a response and a personal hearing. After reviewing the bank’s submissions, additional information, and oral arguments, the RBI concluded that the charges of BR Act contravention and non-compliance with directions were substantiated, justifying the monetary penalty.

By FCCT Editorial Team

Disclaimer: The views expressed in this article are independent views solely of the author(s) expressed in their private capacity.

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