RBI to partially relax remittance transaction restrictions on SBM Bank

The central bank said the bank has initiated corrective actions and made submission for relaxation of the restrictions.

The Reserve Bank of India (RBI) on January 31 partially relaxed restrictions on SBM Bank (India) Ltd related to transactions under the Liberalised Remittance Scheme (LRS), the apex bank said in a release.

“The bank has initiated corrective actions and made submission for relaxation of the restrictions. Based on the submission and also to provide relief to the affected customers of the bank, it has been decided to partially relax the restrictions by allowing ATM/POS transactions under LRS through KYC compliant internationally active debit cards issued by the bank," the RBI said.

The relaxation is up to March 15, 2023, or until further orders, whichever is earlier.

Earlier, on January 23, the central bank barred SBM Bank (India) Ltd from transactions under LRS till further orders.

"The Reserve Bank of India has today, 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 said on January 23.

The action was based on certain material supervisory concerns observed in the bank, the RBI had said. The central bank didn't specify the supervisory concerns surrounding the bank.

SBM Bank is a subsidiary of Mauritius-based SBM Holdings. SBM Group is a financial services group offering products and services including deposits, lending, trade finance and cards among others, according to its website.