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MUMBAI — The Reserve Bank of India has imposed fines on HDFC Bank and Bank of America under the powers vested in it through sections of the FEMA.
While HDFC has been fined for violation of the RBI's directions on acceptance of deposits from non-residents, Bank of America has been imposed a penalty for violating instructions on reporting requirements under the Liberalised Remittance Scheme of FEMA 1999. The penalty in each case is Rs 10,000.
The RBI had issued show cause notices to both banks, in response to which they submitted written replies and also made oral submissions. After considering the facts of each case and the replies of the two banks, the RBI came to the conclusion that the violations were substantiated and warranted imposition of penalty.
However, at the same time, the RBI clarified that the action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the two banks with their customers.
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