RBI penalises five foreign exchange dealer banks for FEMA rule violations

The Reserve Bank of India (RBI) has imposed monetary penalty on five authorized foreign exchange dealer banks for violation of RBI instructions on reporting requirements under the Foreign Exchange Management Act, 1999 (FEMA).

RBI has imposed a total Rs60,000 on the five banks, all foreign bans, which include Bank of America, Bank of Tokyo Mitsubishi, Deutsche Bank, The Royal Bank of Scotland and Standard Chartered Bank. Deutsche bank was awarded the highest penalty of Rs20,000, as per an RBI release.

''The penalties have been imposed in exercise of the powers vested in the Reserve Bank under the provisions of Section 11(3) of FEMA 1999, taking into account, the violations of the instructions/directions/guidelines issued by the Reserve Bank of India, from time to time,'' the release stated.

RBI said it had issued show-cause notices to the banks, in response to which the banks submitted written replies and also made oral submissions thereon. After considering the facts of the cases and the banks' replies in the matter, RBI came to the conclusion that the violations were substantiated and warranted imposition of penalty, RBI added.