RBI imposes penalty worth Rs 10,000 on HDFC Bank for violation of FEMA norms

By: Pune Pulse

December 1, 2023

Pune: On November 30, the Reserve Bank of India (RBI) penalized HDFC Bank, Bank of America, and three co-operative banks for breaching regulations. The central bank imposed a fine of Rs 10,000 on both HDFC Bank and Bank of America for non-compliance with guidelines on accepting deposits from non-residents (NRIs). 

The Dhrangadhra People’s Co-operative Bank in Gujarat has been fined Rs 1 lakh by the RBI for failing to comply with regulations regarding the placement of deposits with other banks by primary (urban) co-operative banks (UCBs).

The Reserve Bank of India has issued individual press releases stating that it has utilized its authority under Section 11(3) of FEMA, 1999 to send show-cause notices to the two banks prior to taking any action.

In its statement, the Reserve Bank of India stated that it had issued a show cause notice to the bank. In response, the bank provided a written reply and made oral submissions. After carefully examining the facts of the case and the bank’s response, the Reserve Bank of India reached the conclusion that the violations were proven and justified the imposition of a penalty.

According to a press release by RBI, the penalty has been enforced under the authority granted to them by Section 47-A (1) (c) in conjunction with Sections 46 (4) (i) and 56 of the Banking Regulation Act, 1949. 

Additionally, RBI has imposed a monetary fine of Rs 1.50 lakh on Patliputra Central Cooperative Bank, Bihar, and Mandal Nagarik Sahakari Bank of Ahmedabad, Gujarat for non-compliance.