Reserve Bank of India (RBI) said on Tuesday that it has decided to partially relax restrictions on SBM Bank (India) till March 15 by allowing ATM and Point of Sale transactions on internationally active debit cards issued by the Bank.
Last week, the Reserve Bank ordered a freeze on all transactions under SBM Bank Liberalized Remittance Scheme (LRS) — which allows Indian residents to remit up to $250,000 abroad every fiscal year — until further notice, citing “material oversight concerns” but giving no further details.
SBM Bank is engaging with the RBI to address “supervisory concerns,” the lender said days later in an email to a customer reviewed by Reuters.
“The bank has initiated remedial measures and has made a submission for deregulation,” the RBI said in a statement.
The relaxation under LRS is based on SBM’s submission and to provide relief to affected customers, the central bank said.
SBM Bank India is a unit of State Bank Mauritius became the first foreign bank to receive a universal banking license under India’s scheme for wholly-owned subsidiaries, which allowed foreign lenders to compete with Indian banks.