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RBI Imposes Monetary Penalty on IDBI Bank and Citibank N.A.

Banking & Finance | Dated: 25 Mar 2025

In March 2025, the Reserve Bank of India (RBI) imposed penalties on Mumbai (Maharashtra)-based IDBI Bank Limited, formerly known as Industrial Development Bank of India Limited (IDBI), and New York, United States of America (USA)-based Citibank N.A. for violating rules under the Foreign Exchange Management Act (FEMA), 1999.

🎯 Key Highlights:

  • - This action was taken due to regulatory compliance deficiencies and does not question the validity of any transaction or agreement between the bank and its customers.

💡 Other Important Facts:

  • (i) The RBI fined IDBI Bank a penalty of Rs 36,30,000 for failing to conduct due diligence while processing inward remittances from a Foreign Currency Account (FCA) opened by a constituent, leading to a violation of Section 10(4) of FEMA, 1999.
  • (ii) The RBI fined Citibank N.A. a penalty of Rs 36,28,000 for failing to comply with RBI's guidelines on reporting transactions under the Liberalised Remittance Scheme (LRS), which permits Indian residents to remit funds abroad. The penalty was imposed under Section 11(3) of FEMA, 1999.

📚 Test Your Knowledge:

RBI Imposes Monetary Penalty on _______ and Citibank N.A.

Correct Answer: IDBI Bank

🚀 Quick Recap:

About RBI

  • Governor : Sanjay Malhotra
  • Headquarter : Mumbai