Money & Banking

RBI slaps ₹3-crore monetary penalty on SBM Bank (India)

Our Bureau Mumbai | Updated on October 16, 2019 Published on October 16, 2019

File photo   -  Reuters

The Reserve Bank of India (RBI) has imposed a monetary penalty of ₹3 crore on SBM Bank (India) for non-compliance by SBM Bank (Mauritius) with certain provisions of its directions on ‘time-bound implementation and strengthening of SWIFT-related operational controls’ and ‘cyber security framework in banks’

The Indian undertaking of SBM Bank (Mauritius) was amalgamated with SBM Bank (India) on November 30, 2018. The central bank, in a statement, said: “This penalty has been imposed in exercise of powers vested in the RBI under the provisions…of the Banking Regulation Act, 1949, taking into account the failure to adhere to the aforesaid directions issued by the central bank.”

This action is based on the deficiencies in regulatory compliance, and is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers, it added.

Referring to a scrutiny carried out by it to examine the implementation of SWIFT-related operational controls in SBM Bank (Mauritius) at its Indian operations, the RBI observed that the bank had failed to comply with certain provisions of the aforesaid directions.

Based on the findings of the scrutiny and taking into account that the Indian undertaking of SBM Bank (Mauritius) was amalgamated with SBM Bank (India), a notice was issued to the latter advising it to show cause as to why penalty should not be imposed for non-compliance with the directions.

After considering the reply received from SBM Bank (India), oral submissions made in the personal hearing, and examination of additional submissions, the RBI said it came to the conclusion that the aforesaid charges of non-compliance with its directions were sustained and warranted imposition of monetary penalty.

Published on October 16, 2019
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