RBI slaps penalties on Axis Bank, UCO Bank and Syndicate Bank for violation of norms
The Reserve Bank of India (RBI) on Tuesday said it has imposed a total penalty of Rs 2.2 crore on private sector lender Axis Bank in two separate cases. A penalty of Rs 2 crore has also been imposed on UCO Bank and Rs 1 crore on Syndicate Bank for violation of norms.
The RBI said penalty of Rs 2 crore has been imposed each on Axis Bank and UCO Bank for non-compliance of norms related to payment through cheques.
In another case, a penalty of Rs 20 lakh has been imposed on Axis Bank for contravention of the directions related to detection and impounding of counterfeit notes.
The penalty on Syndicate Bank has been imposed for violation of guidelines related to checking fraud and managing risk.
The RBI, however, said the action on banks 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.
RBI may change stance to ‘Neutral’ at first policy meet in 2019
Reserve Bank of India Governor Shaktikanta Das-led Monetary Policy Committee may refrain from easing interest rates on concerns on India’s fiscal deficit but will likely change its policy stance from ‘calibrated tightening’ to ‘neutral’ as inflation continues to remain below its medium-term target of 4%.
The central bank is likely to hold the repo rate at 6.5% as the government, in its interim budget 2019, revised the FY2019 fiscal deficit target to 3.4% as compared to the budget estimate of 3.3%. The Centre also plans to maintain 3.4% fiscal deficit target for FY2020, is higher than 3.1% recommended by The Fiscal Responsibility and Budget Management (FRBM) Act, 2003.
A substantial increase in market borrowing on account of the sops offered to farmers and the tax rebate offered may pose fiscal challenges, which are inflationary and may restrict the Indian central bank from cutting the repo rate.
However, a section of the market expects the central bank to cut rates this week as inflation remains well below the central bank’s medium term target.
Persistently lower food inflation that pushed the December CPI to 18-month low of 2.19% will provide respite to the RBI and give room for change in policy stance. The RBI Monetary Policy Committee (MPC) is expected to conclude its Sixth Bi-monthly monetary policy meeting and deliver its decision at 11.45AM on February 7, 2019.
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