RBI imposed Monetary Penalty of Rs.36 Lakh on HSBC Limited; Know Why?

The Reserve Bank of India (RBI) has imposed a Monetary penalty of Rs.36,38,000 on HSBC Limited – Authorised Dealer Bank.

In the exercise of powers vested in the Reserve Bank under the provisions of Section 11(3) of FEMA, 1999, RBI imposed a penalty for violation of the Reserve Bank of India’s instructions on reporting requirements under the Liberalised Remittance Scheme of FEMA 1999.

The Reserve Bank of India had issued a Show Cause Notice to the bank, to which the bank responded with a written reply and also made oral submissions thereon. After analyzing the facts of the case and the bank’s response, the Reserve Bank of India concluded that the violations were proven and warranted the imposition of a penalty.

This action is based on shortcomings in regulatory compliance and is not intended to rule on the legitimacy of any transaction or agreement entered into by the bank with its clients.