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Reserve Bank Of India: The country’s central bank on January 23 has banned all transactions under the Liberalized Remittance Scheme (LRS) of SBM Bank (India) Limited with immediate effect. This ban will remain in force till the next order of the Reserve Bank (RBI). RBI said that this ban has been imposed because some financial concerns have been seen in the bank.
Giving information in a letter, the Reserve Bank said that in exercise of its powers under Section 35A and 36(1)(a) of the Banking Regulation Act, 1949, SBM Bank (India) Limited has been notified under the Liberalized Remittance Scheme with immediate effect. (LRS) has been directed to stop all transactions, which may be implemented after further orders.
Why did RBI do this
RBI said that this action has been taken due to some concerns seen in the bank. The central bank did not give information about the concerns in its order. Please tell that SBM Bank is a subsidiary of Mauritius-based SBM Holdings. SBM Group is a financial services group that offers services including deposits, loans, finance for business and cards, among others.
SBM Bank (India) was fined
SBM Bank (India) started operations on 1 December 2018 after obtaining a banking license from RBI. This bank has a total of 11 branches across the country. SBM Bank deals in corporate, retail and treasury catering to customers in retail, MSMEs, NRIs as well as large corporates and institutions. RBI had imposed a monetary penalty of Rs 3 crore on SBM Bank in October 2019.
What is LRS scheme?
Under the Liberalized Remittance Scheme, with the help of the bank, any resident of the country can send an amount of up to $ 250,000 during each financial year. The Reserve Bank can also change this limit from time to time. Explain that the SBM unit was licensed by the Reserve Bank of India to do banking business in India through WOS mode.
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