RBI imposes Rs 4 crore penalty on Citibank

The Reserve Bank has imposed a penalty of Rs four crore on Citibank for non-compliance with numerous regulatory norms and instructions of the central financial institution.

In a launch, RBI mentioned the penalty has been imposed on Citibank N.A. for contravention of sure sections of the Banking Regulation Act and for non-compliance with instructions.

The instructions pertained to acquiring declaration from prospects about credit score services loved with different banks, granting non-fund based mostly services to non-constituent debtors, verifying information obtainable in CRILC database and acquiring NOC from lending banks on the time of opening present accounts, and submission of compliance to danger evaluation findings.

RBI mentioned the statutory inspection of the Indian operations of the financial institution close to its monetary positions as on March 31, 2017 and March 31, 2018 and the Risk Assessment Reports (RARs) pertaining thereto revealed, inter-alia, contravention with the provisions of the Act and non-compliance with sure instructions issued by the central financial institution, following which a discover 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 mentioned. The penalty has been imposed by an order dated January 8, 2020, it added.

The RBI has additionally imposed penalty on three co-operative banks for non-compliance with numerous instructions issued by it. A penalty of Rs 60 lakh has been imposed on Bharat Co-operative Bank (Mumbai) Limited for non-compliance with instructions on earnings recognition and asset classification (IRAC) norms and frauds classification and reporting.

It mentioned a penalty of Rs 40 lakh was imposed on Nagar Urban Co-operative Bank, Ahmednagar for violation of norms, together with these on IRAC. ]

Also, Rs 45 lakh penalty has been slapped on TJSB Sahakari Bank Limited for non-compliance with instructions on IRAC norms.

In all of the circumstances, RBI mentioned motion was based mostly on deficiencies in regulatory compliance and “is not intended” to pronounce upon the validity of any transaction or settlement entered into by them with prospects.