UNION OF INDIA THROUGH SECRETARY vs CITI BANK N.A.

The Supreme Court addressed the legality of a show-cause notice issued to Citi Bank for alleged violations of the Foreign Exchange Regulation Act (FERA) concerning foreign currency deposits in an NRE account. The court found that the restrictions imposed by the Reserve Bank of India were not retroactive and thus the bank's actions prior to the circular's effective date were lawful. Consequently, the court ruled in favor of the bank, quashing the show-cause notice.