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RBI Fines HSBC Rs 36.38 Lakh for FEMA Violations

The Reserve Bank of India (RBI) has imposed a fine of Rs 36.38 lakh on HSBC for violations of the Foreign Exchange Management Act (FEMA). The central bank stated that HSBC failed to adhere to the reporting requirements under the Liberalized Remittance Scheme of FEMA, 1999.

Introduced by the RBI in 2004 under FEMA, the Liberalized Remittance Scheme allows resident individuals, including minors, to remit up to $250,000 abroad in a financial year (April to March) without needing RBI approval. However, the remitted funds must be used for activities permitted under FEMA.

The RBI issued a show cause notice to HSBC regarding these violations. After reviewing HSBC’s written reply and oral submissions, the RBI concluded that the violations were substantiated, justifying the imposition of the penalty.