The AT found a contravention of Section 10(5) of FEMA by the...

The AT found a contravention of Section 10(5) of FEMA by the appellant bank in remitting Rs. 47.3 Crores in interest. The bank failed to verify fund utilization and ensure compliance with foreign investment regulations. While initially imposing a Rs. 5 Crores penalty, the AT reduced it to Rs. 50 lakhs, considering the circumstances. The tribunal noted the bank's obligation to obtain declarations and prevent regulatory violations. The appeal was disposed of with directions to return Rs. 4.50 Crores to the appellant bank after retaining the reduced penalty amount.

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