MUMBAI: The Reserve Bank on Wednesday imposed a Rs 3 crore penalty on SBM Bank (India) for non-compliance of regulatory norms by SBM Bank (Mauritius), which amalgamated with the former in November 2018.
The penalty has been imposed for non-compliance by SBM Bank (Mauritius) with certain provisions of directions issued by the central bank on 'Time-bound implementation and strengthening of SWIFT - related operational controls' and 'Cyber Security Framework in Banks', the Reserve Bank of India (RBI) said in a statement.
A scrutiny was carried out by RBI to examine the implementation of SWIFT related operational controls in SBM Bank (Mauritius) at its Indian operations, and it was observed that it failed to comply with certain provisions, the RBI said.
Based on the findings of the scrutiny and taking into account that Indian undertaking of the bank was amalgamated with SBM Bank (India), a notice was issued to SBM Bank (India) 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 personal hearing, and examination of additional submissions, RBI came to the conclusion that the charges of 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.
Source: economictimes.indiatimes.com