Reserve Bank of India has slapped a penalty of Rs 2 crore on State Bank of India for contravention of regulatory norms.

The penalty has been imposed for contravention of certain sections of Banking Regulation Act and specific directions of RBI issued to the bank on payment of remuneration to employees in the form of commission, according to a release.

RBI said the action 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.

The statutory inspection of SBI with reference to its financial position as on March 31, 2017 and March 31, 2018 and the Risk Assessment Reports pertaining thereto, and examination of the correspondence with the bank regarding payment of remuneration to its employees in the form of commission, revealed contravention of the provisions of the Act and the directions issued by the RBI.

A show cause notice was issued to SBI. After considering the bank’s replies, RBI came to the conclusion that "the charges were substantiated and warranted imposition of monetary penalty", the release said.