RBI imposes ₹50 lakh penalty on Bombay Mercantile Co-operative Bank

The penalty was imposed for deficiency in regulatory compliance

The Reserve Bank of India (RBI) on September 3 said it has imposed a penalty of ₹50 lakh on Bombay Mercantile Co-operative Bank, Mumbai for deficiency in regulatory compliance. The RBI has also imposed a penalty of ₹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 Ltd was imposed for non-compliance with directions contained 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. 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.