RBI in Mumbai, Wednesday – RBI cuts Repo Rate by 25 bps: of third bi-monthly monetary policy, 2017-18. Express Photo by Pradip Das. 29.07.2017. Mumbai.
A penalty of Rs 3 crore and Rs 2 crore was imposed on Axis Bank and Indian Overseas Bank (IOB), respectively by the Reserve Bank of India (RBI) on Monday, PTI reported citing a statement released by the RBI. The penalty was imposed by the central bank on the lending institutions for not complying with the known your customer (KYC) regulations. With respect to the financial position of Axis Bank, RBI had carried out a statutory inspection on March 31, 2016 and thereafter learnt that the bank had violated various regulations in carrying out assessment of the NPAs, PTI reported citing a statement issued by the central bank. In case of Indian Overseas Bank, a public sector entity, the RBI detected a fraud at one of the branches of the bank. The central bank said that the latest action taken by it is based on the regulatory compliance deficiencies.
Meanwhile, RBI also said on Monday it an additional liquidity of Rs 1 lakh crore will be injected by it in the banks via long term financial instruments, PTI said. The aim behind injection of liquidity is to ensure flexibility to meet the fund needs of the banks. The infusion of liquidity will be one towards March-end. A combination of appropriate instruments will be used to inject this liquidity in the banking system of the country, PTI reported citing RBI statement released on Monday. The infusion of liquidity will be done in addition to the regular Liquidity Adjustment Facility (LAF) operations. In March 2018, the central bank will conduct four variable term repurchase auction to the tune of Rs 25,000 crore.
The latest decision by the RBI to infuse additional liquidity in the banking system will help restrict the short-term rates and also help in bringing down the interest rate volatilities for the remaining month, ICRA said.
The shares of both Axis Bank and Indian Overseas Bank will be in focus today post the implementation of penalty by the Reserve Bank of India for not adhering with the KYC regulations. Axis Bank was trading at Rs 530 up by 1.04 percent and Indian Overseas Bank was at Rs 19.40 down by 0.26 percent at the time of reporting.
Source by:- financialexpress