RBI relaxes restrictions on SBM Bank (India) till March 15

The Reserve Bank of India (RBI) on Tuesday relaxed the restrictions on SBM Bank (India) and allowed ATM/POS transactions under Liberalised Remittance Scheme (LRS) till March 15.

The banking regulator, on January 23, asked SBM Bank (India) to stop with immediate effect all transactions under the Liberalised Remittance Scheme (LRS) till further orders.

"The bank has since initiated corrective actions and made submission for relaxation of the restrictions," the RBI said.

Based on the submission and also to provide relief to the affected customers of the bank, it has been decided to partially relax the restrictions by allowing ATM/POS transactions under LRS through KYC-compliant internationally active debit cards issued by the bank, it said.

"The relaxation is up to March 15, 2023, or until further orders, whichever is earlier," the RBI added.

An SBM Bank (India) spokesperson in a statement said the RBI has permitted the bank’s customers (KYC-compliant accounts) to use their debit cards for physical purchase at merchant outlet and ATM cash withdrawal overseas till March 15, 2023.

"We wish to iterate that our intent has always been to work toward the customers’ interest and stay committed to upholding the highest standard of banking," the spokesperson said.

However, international e-commerce/online transaction continues to be blocked till further notice, the bank added.

Under the Liberalised Remittance Scheme, Indian residents, including minors, are allowed to freely remit up to USD 2,50,000 per financial year (April-March) for any permissible current or capital account transaction or a combination of both.

In December 2018, the RBI sanctioned the Scheme of amalgamation of the entire undertaking of SBM Bank (Mauritius) Limited, India with SBM Bank (India) Limited which was granted a licence to carry on the business of banking in India through a wholly-owned subsidiary.