The Reserve Bank of India (RBI) on Friday said it had imposed a penalty of Rs 50 lakh on Bombay Mercantile Co-operative Bank, Mumbai, for deficiency in regulatory compliance. The RBI has also set a penalty of Rs 2 lakh on Akola District Central Co-operative Bank Limited, Akola (Maharashtra), for non-compliance with specific provisions of Know Your Customer (KYC) norms.

The penalty on Bombay Mercantile Co-operative Bank Ltd was imposed for non-compliance with directions in the Reserve Bank of India (Co-operative Banks – Interest Rate on Deposits) Directions, 2016 and specific directions under the Supervisory Action Framework (SAF), RBI said in a statement.

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The statutory inspection of the bank conducted by RBI concerning the bank’s financial position as of March 31, 2019, the inspection report about it, and examination of all related correspondence revealed that it had offered interest rates on NRE deposits higher than those provided by it on comparable domestic rupee term deposits.

In another statement, the RBI said the inspection report of The Akola District Central Co-operative Bank based on its financial position as of March 31, 2019, and the inspection report about it revealed that it had failed to put in place a robust system for alerts as part of adequate identification and monitoring of suspicious transactions.