On November 24, 2023, the Reserve Bank of India (RBI) imposed a penalty of USD 0.59 million on Citibank N.A. India for contravening the provisions of the Banking Regulation Act, 1949, and for non-compliance with the KYC Direction on Managing Risks and Code of Conduct in the Outsourcing of Financial Services by banks.

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Citibank’s Inspection for Supervisory Evaluation (ISE 2021) revealed several instances of non-compliance by the bank, including:

• Violation of KYC directives and the Code of Conduct in outsourcing financial services.
• Outsourcing of monitoring and disposal/closure of AML alerts to a Group company.
• Delay in crediting the Depositor Education and Awareness Fund.
• Payment of remuneration in the form of commission to certain staff members.