News

RBI orders SBM Bank to stop all transactions under the LRS

Wednesday 25 January 2023 10:24 CET | News

The Reserve Bank of India (RBI) has ordered SBM Bank India to stop all transactions under Liberalised Remittance Scheme (LRS) till further orders.

Under the LRS, any resident person, including minors, is free to freely remit up to USD 2,50,000 per fiscal year for any permitted current account transaction, capital account transaction, or combination of both. Corporate entities, partnership businesses, HUFs, Trusts, etc. are not eligible for the program.

The Reserve Bank of India (RBI) orders SBM Bank India to stop all transactions under Liberalised Remittance Scheme (LRS) till further orders.

According to RBI, the decision was made by due to some serious supervisory concerns within the bank. Although the RBI has not established a timeframe, SBM is trying to make sure that it complies with all regulations as soon as is feasible, according to Reuters.

One of the most fintech-friendly enterprises, SBM Bank India has partnerships with numerous emerging companies. In order to provide its customers with a variety of options, such as currency transactions and the possibility to buy foreign equities, a number of companies have ties with the bank. Some of these firms are already attempting to establish a collaboration with a different bank.

India’s digital growth

According to Ramesh Narasimhan, CEO of Worldline India, 'Digital India', served as the catalyst for India's digital transformation. ‘Digital India’ is a campaign launched in 2015 to ensure that the nation's citizens are connected through high-speed networks and can access a robust digital ecosystem.

However, the constantly evolving regulatory environment and the continual changes in the digital and payments sector might be problematic. Finding the ideal payment service provider (PSP) may therefore be essential for long-term success. In addition to being able to guarantee that it can manage data within the restrictions of Indian compliance rules, including privacy, a PSP should also be able to collect money locally, offer international money transfers, and provide access to local payment options.

The option to effortlessly transfer cross-border revenues in the merchant's preferred currency is another 'must have' for businesses. To maximise consumer satisfaction throughout their payment journey, a retailer should also be able to list services in Indian rupees through its payment processes.

India’s homegrown payments network

To nurture this digital growth and support payments for ecommerce and securities investments, RBI added a single-block-and-multiple debits functionality to UPI in December 2022. The RBI claims that the functionality will simplify payments for securities investments and ecommerce. Hotel reservations, the purchase of assets on the secondary capital market, the purchase of government securities through the Retail Direct program of the central banks, and other ecommerce activities would all benefit from it.

This aims to increase trust in transactions by assuring merchants of prompt payments and keeping the money in the customer's account until the products or services are actually delivered. Customers can also activate a merchant's payment mandate by designating funds in their bank accounts for debits as needed.

In order to encourage the expansion of its national payments network, India has budgeted approximately USD 320 million to promote cards in RuPay and low-value UPI transactions.


More: Link


Free Headlines in your E-mail

Every day we send out a free e-mail with the most important headlines of the last 24 hours.

Subscribe now

Keywords: central bank, banks, remittance, transactions , digital currency
Categories: Banking & Fintech
Companies: Reserve Bank of India, SBM Bank India
Countries: India
This article is part of category

Banking & Fintech

Reserve Bank of India

|

SBM Bank India

|
Discover all the Company news on Reserve Bank of India and other articles related to Reserve Bank of India in The Paypers News, Reports, and insights on the payments and fintech industry: