SBM Bank India Ltd. news update
The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹88.70 lakh (Rupees Eighty Eight Lakh Seventy Thousand) on SBM Bank (India) Ltd. This penalty is for non-compliance with licensing conditions and specific RBI directives to cease Liberalised Remittance Scheme (LRS) transactions immediately.
The penalty follows supervisory findings of non-compliance with RBI directives and conditions. Two separate notices were issued to SBM Bank India Ltd, advising it to show cause for its failure to comply with these directions. After considering the bank’s responses, additional submissions, and oral arguments during a personal hearing, the RBI determined that the bank had: (i) engaged Business Correspondents for establishing account-based relationships with customers from certain regions, despite RBI’s refusal to approve this, and (ii) processed certain LRS transactions despite instructions to halt such activities immediately.
This action addresses regulatory compliance deficiencies and does not comment on the validity of any transactions or agreements the bank has with its customers. Additionally, the imposition of this monetary penalty does not preclude the RBI from taking further action against the bank.
