RBI asks SBM Bank to put brakes on remittance transactions immediately

The Reserve Bank of India has asked SBM Bank (India), the Indian subsidiary of State Bank of Mauritius (SMB), to immediately stop transactions under the Liberalised Remittance Scheme (LRS) until further notice.

The banking regulator in a statement said the action was based on certain material supervisory concerns observed in the bank. It, however, did not elaborate on the nature of concerns.

LRS pertains to external remittances by resident individuals for purposes like abroad studies, medical treatment, maintenance of close relatives, and investments and travel.  

SBM commenced operations in India on December 1, 2018. It was the first universal bank in the country to receive a banking licence from the RBI through the wholly owned subsidiary (WOS) route. Globally, it is part of SBM Group.

 According to SMB Bank (India)'s annual report for 2021-22, it has over 300 team members serving over 4 million customers and clients across the country. It has a physical presence in eight locations, backed by an advanced digital solutions infrastructure.

 Its total deposits rose by 76.4 per cent YoY to Rs 6,799.44 crore at the end of March 2022, from Rs 3,855.18 crore at the end of March 2021. The loan book or advances registered an increase of 49.2 per cent from Rs 2,917.33 crore at end of FY21 to Rs  4,355.57 crore at the end of FY22.