Reserve Bank Of India Imposes Rs 3 Crore Penalty on SBM Bank India For Not Complying With Regulatory Norms

The Reserve Bank of India (RBI) has imposed a Rs 3 crore penalty on SBM Bank (India) for non-compliance of regulatory norms by SBM Bank (Mauritius), which had amalgamated with the former in November 2018.

SBM Bank (Mauritius) had failed to comply with certain provisions of RBI directions on 'Time-bound Implementation and Strengthening of SWIFT -related Operational Controls' and 'Cyber Security Framework in Banks'.

According to an RBI statement, a scrutiny to examine implementation of SWIFT-related operational controls in SBM Bank (Mauritius) at its Indian operations revealed that it failed to comply with certain provisions.

Taking this into account, a notice was issued to SBM Bank (India) advising it to show cause as to why penalty should not be imposed on it for non-compliance with RBI directions.

After taking into account the reply received from SBM Bank (India), oral submissions and examination of additional submissions, RBI concluded that charges of non-compliance with directions warranted imposition of monetary penalty.

According to the RBI statement, the penalty is based on deficiencies in regulatory compliance and not intended to pronounce the validity of any transaction or agreement entered into by the bank with its customers.