The Reserve Bank of India (RBI) has taken significant action by imposing a substantial fine on SBM Bank (India) for failing to adhere to regulatory norms.
This step underscores RBI’s commitment to ensuring strict compliance with its guidelines.
Details of the Fine
On Friday, RBI announced a fine of Rs 88.70 lakh on SBM Bank (India). The penalty was imposed due to the bank’s non-compliance with conditions related to its RBI license.
Additionally, the bank has been instructed to halt transactions under the Liberalized Remittance Scheme (LRS) with immediate effect.
Investigation and Findings
RBI’s decision came after a thorough investigation. The bank was issued two separate notices, requiring it to explain its actions.
Following a review of the bank’s responses, further submissions, and oral arguments during a personal hearing, RBI concluded that SBM Bank had indeed violated regulatory norms, justifying the monetary penalty.
Immediate Transaction Prohibition
Despite RBI’s directive, SBM Bank continued certain transactions under the Liberalized Remittance Scheme.
While the fine highlights regulatory deficiencies, RBI clarified that this penalty does not impact the validity of any existing transactions or agreements the bank has with its customers.
This decisive action by RBI serves as a reminder to all financial institutions about the importance of strict adherence to regulatory standards.
