SBI California, a US subsidiary of the State Bank of India , has been told by federal agencies not to open a new bank in the country without the permission of regulators and to bolster its compliance with the Bank Secrecy Act.
In its March 20 order, the Federal Deposit Insurance Corporation and the California Department of Financial Institutions, have asked SBI California to have and retain qualified management and conduct within 90 days an independent study to ensure it "is staffed by qualified individuals commensurate with its size and risk profile to ensure the safe and sound operation of the bank".
The 17-page order also orders SBI California - which has its branches in Washington DC - to appoint a well-qualified chief executive office, chief financial officer, a president / chief operating officer and a bank secrecy act (BSA) officer.
In doing so, the order seeks to ensure that the bank complies with the applicable laws and regulations, and operates in a safe and sound manner.
The federal and the state agencies require the right to determine if the SBI has qualified management officials, the order said.
SBI California, which has collective assets of $787 million, has also been asked to eliminate from its books, by charge-off or collections, all assets classified "Loss" in the ROW that have not been previously collected or charged-off.
Among other things, the order also requires the bank to file with the FDIC "Reports of Condition and Income which accurately reflect the financial condition of the Bank" including "any adjustment in the Bank's books made necessary or appropriate as a consequence of any FDIC and/or CDFI examination of the Bank".