Action on SBM Bank (India)
Case Brief
The Reserve Bank of India issued directions under sections 35A and 36(1)(a) of the Banking Regulation Act, 1949, directing SBM Bank (India) Ltd to stop all transactions under the Liberalised Remittance Scheme (LRS) with immediate effect and until further orders. RBI said the move was based on certain material supervisory concerns observed in the bank.
In exercise of its powers under sections 35A and 36(1)(a) of the Banking Regulation Act, 1949, RBI directed SBM Bank (India) Ltd to stop, with immediate effect, all transactions under the Liberalised Remittance Scheme (LRS) till further orders. The release states that the action was taken because of certain material supervisory concerns observed in the bank.
Severity Assessment
This is a targeted operational prohibition on a specific banking activity, which falls under severity 4 as a directive/prohibition with immediate business impact.
SBM Bank (India) Ltd must immediately halt all LRS transactions until RBI issues further orders. This affects customers using remittance services under the scheme and limits the bank’s ability to process those transactions forward-looking.
Published as SBM Bank (India) Ltd
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