RBI has directed SBM Bank to stop LRS transactions under Section 35A and 36 (1) (a) of the Banking Regulation Act, 1949.
New Delhi:
The Reserve Bank of India (RBI) has directed SBM Bank (India) Ltd to stop all Liberalized Remittance Scheme (LRS) transactions with immediate effect until further notice. RBI has directed SBM Bank to stop LRS transactions under Section 35A and 36 (1) (a) of the Banking Regulation Act, 1949.
The Bank, in exercise of its powers under Section 35A and 36(1)(a) of the Banking Regulation Act, 1949, has directed SBM Bank (India) Limited to stop all transactions under the Liberalized Remittance Scheme (LRS) with immediate effect until further orders. has been instructed. This action is based on some material supervisory concerns noticed in the bank,” RBI said in its release.
Under the LRS scheme, all resident individuals including minors are permitted to freely remit money abroad up to $2,50,000 per financial year. The scheme was launched on February 4, 2004 with a limit of USD 25,000.
SBM Bank is a subsidiary of Mauritius based SBM Holdings. It started its operations on 1 December 2018.
In 2019, the RBI imposed a penalty of Rs 3 crore on SBM Bank (India) for non-compliance of regulatory norms by SBM Bank (Mauritius), which amalgamated with the bank in November 2018.
The Reserve Bank of India (RBI) in a statement said the penalty was imposed by SBM Bank (Mauritius) for non-compliance of certain provisions of the directions issued by the central bank on ‘time-bound implementation and strengthening of operational controls relating to SWIFT’ and ‘cyber security framework in banks’. imposed for non-compliance.