Banks failed to exercise due diligence by opening letters of ...

Lax scrutiny by banks in FX transactions leads to penalties for violating forex regulations.

Case Laws FEMA

November 18, 2024

Banks failed to exercise due diligence by opening letters of credit and remitting foreign exchange despite non-submission of bills of entry and other mandatory documents by importers, amounting to contravention of foreign exchange regulations. Banks and their officers were held liable for abetment and negligence u/ss 8(3), 8(4), 64(2) and 68 of the Foreign Exchange Regulation Act, 1973 for processing transactions without proper scrutiny and documentation, even after repeated reminders and lack of justification from importers. The Appellate Tribunal upheld the findings of the Special Director, concluding that the banks and their employees were rightly penalized for their involvement in the contraventions.

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Banks failed to exercise due diligence by opening letters of ...

Lax scrutiny by banks in FX transactions leads to penalties for violating forex regulations.

Case Laws FEMA

November 18, 2024

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