The Reserve Bank of India (RBI) has slapped a fine of Rs 50 lakh on Bombay Mercantile Co-operative Bank, Mumbai for deficiency in regulatory compliance.

The RBI has also imposed a penalty of Rs 2 lakh on Akola District Central Co-operative Bank Limited, Akola (Maharashtra) for non-compliance with certain provisions of Know Your Customer (KYC) norms.

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

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

The bank had also sanctioned unsecured advances. 

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

In both cases, the RBI said the penalties are based on deficiencies in regulatory compliance and not intended to pronounce upon the validity of any transaction or agreement entered into by the banks with their customers.