In a significant move underscoring its commitment to strict regulatory compliance, the Reserve Bank of India (RBI) has levied a hefty fine of ₹36,38,000 on The HSBC Limited. This penalty, announced on May 29, 2024, stems from HSBC’s failure to adhere to the RBI’s guidelines concerning reporting requirements under the Liberalised Remittance Scheme (LRS) of the Foreign Exchange Management Act (FEMA), 1999. The RBI’s decision followed a thorough evaluation of the bank’s written and oral submissions in response to a Show Cause Notice. This action highlights the central bank’s vigilant stance in enforcing compliance to ensure the integrity of financial transactions and operations within the country’s banking sector.
RBI imposes monetary penalty on Authorised Dealer Bank – The HSBC Limited
Date : May 29, 2024
The Reserve Bank of India has imposed a monetary penalty of ₹36,38,000/- (Rupees Thirty Six Lakh Thirty Eight Thousand only) on The HSBC Limited in exercise of powers vested in the Reserve Bank under the provisions of Section 11(3) of FEMA, 1999, for violation of Reserve Bank of India’s instructions on reporting requirements under Liberalised Remittance Scheme of FEMA 1999.
The Reserve Bank of India had issued a Show Cause Notice to the bank, in response to which the bank submitted a written reply and also made oral submissions thereon. After considering the facts of the case and the bank’s reply in the matter, the Reserve Bank of India came to the conclusion that the violations were substantiated and warranted imposition of penalty.
This 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 bank with its customers.
(Puneet Pancholy)
Chief General Manager
Press Release: 2024-2025/399
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