The Reserve Bank has imposed a Rs 3 crore penalty on SBM Bank (India) for not adhering to the regulatory norms by SBM Bank (Mauritius).
Both the entities amalgamated in November 2018. The penalty has been imposed for non-compliance by SBM Bank (Mauritius) with respect to certain provisions of directions generated by the apex bank on ‘Time-bound implementation and strengthening of SWIFT – related operational controls’ and ‘Cyber Security Framework in Banks’, said the Reserve Bank of India (RBI) in its official communique.
An inspection was performed by the RBI for examining the implementation of SWIFT related operational controls in SBM Bank (Mauritius) at its Indian operations, and it was seen that it did not to comply with certain provisions, the RBI said.
Based on the results of the inspection and considering it’s merger with Indian undertaking of the bank was amalgamated with SBM Bank (India), a notice was slapped to SBM Bank (India) directing it to show cause as to why penalty should not be imposed for non-compliance with the directions.
Taking the reply from SBM Bank (India), oral submissions made in personal hearing, and examination of additional submissions into account , RBI decided to impose a non-compliance with directions were sustained and warranted imposition of monetary penalty, the statement said.
The penalty is based on 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 said.
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