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1-min read

RBI Bars Axis Bank From Importing Bullion for FY19

Banks import raw gold and silver and sell it to the trade participants. This activity helps a bank with fees and deepen its relationships with key clientele, according to the industry analysts.

PTI

Updated:April 3, 2018, 8:11 PM IST
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RBI Bars Axis Bank From Importing Bullion for FY19
Banks import raw gold and silver and sell it to the trade participants. This activity helps a bank with fees and deepen its relationships with key clientele, according to the industry analysts.
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Mumbai: The Reserve Bank has dropped Axis Bank, which has been one of the largest importers of bullion, from the list of lenders allowed to ship in gold and silver for the current fiscal year.

The action comes a day after reports said the central bank asked the board of the third largest private sector lender to re-look at the three-year fourth term offered to Shikha Sharma as the managing director and chief executive, citing a massive spike in bad loans.

The Axis Bank board had late last year re-appointed her for a fourth term beginning this June. She joined the bank from ICICI Bank in June 2009 during her stewardship the NPAs at the bank rose over fivefold to over 5.3 percent in the December 2017 quarter.

The RBI published the list of 16 banks which have been allowed to import the precious metals on Monday on its website, wherein Axis Bank is excluded. Axis Bank was one of the leading importers of gold and silver among all the 19 lenders which were given the licence last year.

Banks import raw gold and silver and sell it to the trade participants. This activity helps a bank with fees and deepen its relationships with key clientele, according to the industry analysts.

The spokespersons for neither Axis Bank, nor the RBI chose to comment on the development. The 16 banks which have been given the licence to import gold and silver for FY19 also include the scam-hit Punjab National Bank reeling under a nearly Rs 13,000 crore fraud created by from the gems and jewellery sector itself.

The list also has other top private sector banks, including Axis Bank's larger rival ICICI Bank which is fighting allegations of conflict of interest or quid pro quo by its chief Chanda Kochhar, HDFC Bank, Kotak Mahindra Bank, Federal Bank and Yes Bank.

The State Bank leads the pack of state-run lenders, while there are also international lenders like the Industrial and Commercial Bank of China and Bank of Nova Scotia. Other banks dropped for the current fiscal include the South-focused private sector lender Karur Vysya Bank and South Indian Bank.

Interestingly, Axis Bank had held on to the licence even after the allegations of wrongdoing by a few staffers during the demonetisation period. After getting battered Monday following the news, the Axis Bank counter rose 1.02 percent to Rs 503.30 on the BSE, whose benchmark Sensex rose 0.35 percent.

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| Edited by: Tarun Bhardwaj
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