RBI has taken a big step. Citibank has been fined. Many NBFCs have been ordered to shut down their business. Let us know what is the reason behind this action?
RBI Action: After the meeting of the Monetary Policy Committee, a big action of the Reserve Bank of India (RBI Action) has come to the fore. The central bank has imposed a fine of Rs 30 lakh 20 thousand on private sector Citi Bank. RBI has taken this step under the provisions of FEMA Act 1999. RBI has given this information on Wednesday and has also issued a statement.
Apart from this, RBI has canceled the license i.e. Certificate of Registration of 6 non-banking finance companies. Now these companies will not be allowed to do business as non-banking financial institutions. At the same time, 11 NBFCs have themselves surrendered their certificate (CoR).
Citibank violated these rules
The bank failed to take proper precautions while processing inward remittances from a foreign currency account opened by a constituent. After discovering the negligence in the rules, RBI had issued a show cause notice to the bank. After which the bank gave written replies and oral submissions. After considering the facts and the bank’s response during the investigation, the violation of rules was proved. After this, a decision was taken to impose a penalty. However, this action will not affect any transaction or agreement between the bank and the customers.
License of these NBFCs located in MP cancelled
On March 24, RBI had issued an order regarding cancellation of COR of 5 NBFCs. This list includes Chennai-based Thamirayaparani Investment Private Limited, Armusk Infrastructure Investments Limited, Vishwapriya Gold Hire Purchase Limited and Matrix Financial Services Limited. Apart from this, the COR of Unitara Finance Limited located in Transport Nagar Indore, MP has also been cancelled. This company was issued a Certificate of Registration on 20 February 1998. At the same time, the license of Welfare Securities Limited located in Ahmedabad, Gujarat was cancelled by RBI on 26 March 2025.
These companies surrendered their licenses
8 companies have surrendered their Certificate of Registration due to exit from the non-banking financial institution business. Whereas three companies have surrendered their COR for reasons like merger/dissolution/amalgamation/voluntary strike. The list of these companies is given below-
