RBI bars Axis Bank from importing gold, silver in 2018-19; shares tumble over 3%

By: | Published: April 4, 2018 1:10 PM

The Reserve Bank of India (RBI) has dropped Axis Bank from the list of banks that have been authorised to import bullion (gold and silver) for the financial year 2018-19.

Axis Bank, Axis Bank rating, fitch, Aircel, Bharti Airtel, Shikha Sharma, department of telecommunicationRBI drops Axis Bank from the list of banks authorised for import of gold, silver. (Image: PTI)

The Reserve Bank of India (RBI) has dropped Axis Bank from the list of banks that have been authorised to import bullion (gold and silver) for the financial year 2018-19. For this financial year, the RBI has released a list of 16 banks including scam-hit Punjab National Bank and controversy-hit ICICI Bank. The central bank did not mention the reason for dropping the bank from the list.

The banks have to ensure that they adhere to the RBI’s Know-Your-Customer (KYC) norms and the Anti-Money-Laundering guidelines for the import of bullion. Besides, the banks should also consider the credentials of the supplier before opening the Letter of Credits and the financial standing, line of business and the net worth of the importer customer should be in line with the volume of business turnover for getting RBI’s authorisation to import gold and silver.

The decision to drop Axis Bank came a day after the RBI asked the bank to re-look at the three-year fourth term offered to Shikha Sharma as the managing director and chief executive, PTI reported. During Shikha Sharma’s tenure, NPAs at the bank rose over fivefold to over 5.3% in the December 2017 quarter.

Banks Authorised to Import Gold/Silver for FY 2018-19 (Image: RBI)

Last month, the RBI had slapped a fine of Rs 3 crore on Axis Bank for violation of NPA classification norms. Similar fines were also slapped on other banks such as Indian Overseas Bank and the State Bank of India (SBI) for non-compliance with various norms.

Axis Bank was among the list of 19 banks that were authorised to import gold and silver in the fiscal year 2017-18. 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 the industry analysts quoted by PTI.

Meanwhile, Axis Bank’s shares were down over 3% on Wednesday at Rs 498.35 per share.

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