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RBI imposes Rs 4 crore penalty on Citibank

RBI imposes Rs 4 crore penalty on Citibank

Mumbai: The Reserve Bank has been fo3ubd to impose a penalty of Rs. 4 crore on Citibank for their non-compliance with several regulatory norms and directions of the central bank.

RBI mentioned the penalty has been imposed on Citibank N A, in a release, for breaching certain sections of the Banking Regulation Act and for non-compliance with directions.

The directions, furthermore, pertained for obtaining announcement about credit facilities that have been enjoyed with other banks, that are in fact granting non-fund based provision to non-constituent borrowers, who verify the data accessible in CRILC database and obtain NOC from foremost banks at the moment of the opening of current accounts, and submission of compliance to risk assessment findings.

RBI stated the statutory inspection of Indian operations of the bank with the reference to the financial position visibly held on March 31st, 2017 and March 31st, 2018 and the Risk Assessment Report (RARs) bearing on thereto divulge, inter-alia, contravention with the provision of the act and the non-compliance with a few directions publicised by the central bank, with the following of which a notice was issued to Citibank.

After considering the bank’s reply to the notice, oral submissions made during the personal hearing and examination of additional submissions, RBI concluded that the aforesaid charges of contravention with the provisions of the Act and non-compliance with RBI directions warranted imposition of monetary penalty,” it pronounced.

The penalty has been levied by an order dated with January 8th, 2020, it added.

The RBI, further in the meantime, also imposed penalty on three co-operative banks for non-compliance with several directions issued by it.

Rs 60 lakh as a penalty has been imposed on Bharat Co-operative Bank (Mumbai) Limited for non-compliance with directions on income recognition and also for asset classification (IRAC) norms and frauds classification and reporting.

Gradually also, it mentioned that a penalty of Rs 40 lakh was imposed on Nagar Urban Co-operative Bank, Ahmednagar for violation of norms, including those on IRAC.

Additionally, Rs 45 lakh penalty has been applied on TJSB Sahakari Bank Limited for non-compliance with directions on IRAC norms.

RBI said, in all the aforementioned cases as witnessed, that action was based on deficiencies in regulatory compliance and “is not intended” to provide words upon the validity of any transaction or agreement entered into by them with customers.


Writer – Soumili Roy

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