RBI orders SBM Bank to stop transactions under remittance scheme with immediate effect

After discovering "material supervisory concerns" in SBM Bank (India) Ltd, the Reserve Bank of India on Monday ordered SBM Bank to stop all transactions under the liberalised remittance scheme with immediate effect. "RBI, in exercise of its powers under sections 35A and 36(1)(a) of the Banking Regulation Act, 1949, directed SBM Bank (India) Ltd to stop, with immediate effect, all transactions under Liberalised Remittance Scheme (LRS) till further orders," the RBI statement read. 'This action is based on certain material supervisory concerns observed in the bank,' it further added. Action against SBM Bank (India) Ltd., under sections 35 A and 36(1)(a) of the Banking Regulation Act, 1949https://t.co/Rkv9PILAgm — ReserveBankOfIndia (@RBI) 1674476113000 In December 2018, the RBI had sanctioned the Scheme of amalgamation of the entire undertaking of SBM Bank (Mauritius) Limited, India with SBM Bank (India) Limited which was granted licence to carry on the business of banking in India through a wholly-owned subsidiary. Under the Liberalised Remittance Scheme, Indian residents, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April - March) for any permissible current or capital account transaction or a combination of both.

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