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India Bank Will Be Hit When Sanctions Fade
Economy, Business And Markets

India Bank Will Be Hit When Sanctions Fade

With sanctions on Iran expected to be lifted over the next few months, UCO Bank is bracing for a hit on margins. To offset the setback, the bank has launched an aggressive campaign to mobilize low cost CASA deposits. The bank is set to lose out interest-free deposits of around Rs 15,000 crore, which is around 8% of its total deposits, once trade with Iran resumes in dollar denomination, CPI Financial reported Wednesday.  
In 2012, after US imposed sanctions on Iran, UCO Bank started a new rupee trade mechanism through which 45% of oil imports of Indian oil companies are settled in rupee denomination-the only bank to do so. Under the mechanism, a few Iranian banks have opened Indian rupee accounts with UCO Bank.

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