The Reserve Bank of India has directed SBM Bank (India) Ltd to stop, with immediate effect, all transactions under the Liberalised Remittance Scheme (LRS) till further orders.
The central bank said its action is based on certain material supervisory concerns observed in the bank.
Under the Liberalised Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to $2,50,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. The scheme is not available to corporates, partnership firms, HUF, Trusts etc.
The scheme was introduced on February 4, 2004, with a limit of $25,000. The LRS limit has been revised in stages consistent with prevailing macro and micro economic conditions.
After operating as a branch of SBM Bank (Mauritius) Ltd since 1994, Mumbai-headquartered SBM Bank (India) Ltd commenced operations on December 1, 2018 as the first universal bank in the country to receive a banking licence from the Reserve Bank of India through the wholly-owned subsidiary (WOS) route. It is is part of the Mauritius-based SBM Group.
The bank has a network of 11 branches -- Mumbai, New Delhi, Chandigarh, Pune, Bengaluru, Chennai, Hyderabad and Ahmedabad, Ramachandrapuram, Palghar and Abitghar.