Five international banks are penalised by the Reserve Bank of India on the grounds of flouting the instructions. As per reports, the five international banks have violated FEMA (Foreign Exchange Management act), 1999. On 1 June 2000, FEMA, which was earlier named as FERA, regulates foreign exchange as well as inflow and outflow of currencies.
It has come to light that the five International Banks namely Bank of America, Bank of Tokyo-Mitsubishi, Deutsche Bank, The Royal Bank of Scotland and Standard Chartered Bank have been converting black money into White money also converting them into foreign currency. These currencies are then sent abroad.
RBI has been monitoring those accounts by which such transfers were done. The Apex bank has now issued a show cause notice to these banks. According to the statement issued by RBI saying, “After considering the facts of the cases and the banks’ replies in the matter, Reserve Bank came to the conclusion that the violations were substantiated and warranted the imposition of penalty.”
As per the new rules implement by the Government, IT (Income Tax) department and Enforcement Directorate (ED) following demonetisation, all the aforesaid International banks will have to pay the penalty of rupees 10,000 each, however, Deutsche Bank will have to pay rupees 20,000.
It seems that PM Modi’s initiative to curb black money has come hard on black money holders and hoarders. RBI penalising the banks for violation the norms sends out a send a strong message about the seriousness of the Government regarding the black money transactions. It can be viewed as a warning for black money holders and the agents who convert it into white money.