The Reserve Bank of India (RBI) monitors the operations of all the banks in the country. Whenever a bank ignores the rules and acts arbitrarily, the RBI can impose a fine on it. In this connection, the Reserve Bank of India has imposed a fine of Rs 88.70 lakh on SBM Bank (India) for not following some regulatory norms.
The Reserve Bank said on Friday that the fine has been imposed on the bank for non-compliance with the conditions related to the RBI license. Apart from this, special instructions have been given to stop transactions under the Liberalized Remittance Scheme (LRS) with immediate effect.
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RBI issued two notices to the bank.
Two separate notices were issued to the bank, in which it was asked to explain the reasons. After the bank’s reply to the notices and its reply, RBI found that the allegations against SBM Bank (India) are true, for which monetary penalty needs to be imposed. The bank also made some transactions under the Liberalised Remittance Scheme, whereas RBI had instructed to stop such transactions with immediate effect.
What will happen to the customers’ money now?
However, RBI said that the fine is based on deficiencies in regulatory compliance and is not intended to affect the validity of any transaction or agreement entered into by the bank with its customers.
