Banks have been awash with unprecedented liquidity after the government pulled out the high denomination Rs 500 and Rs 1000 notes from circulation on November 8.
In a notification on June 30, RBI had said that a major portion of the pre-2005 banknotes have been withdrawn from circulation. It had hence provided an exchange facility for these notes through its ten regional offices across the country.
RBI has promised to treat foreign banks opening local subsidiaries equally with local lenders, giving them the freedom to open branches and also later allow them to acquire local banks.
The ratings agency estimates that LAP as a segment has grown at a compounded rate of 25% per annum, much higher than the 17% growth in retail credit aided by loose underwriting standards.
Over the past few days, law enforcement agencies have raided branches of various banks, unearthing unauthorised cash disbursals and fake accounts.
Growth estimate for 2017 has also been reduced to 7.1 per cent from 7.6 per cent earlier expected.
While banks earned accolades for selfless service and long hours behind the counter in the first few days, the story has changed in the last one week .
The central bank said these companies must do a special audit by 24 empanelled auditors of Indian Computer Emergency Response Team.
The bank had suspended nineteen employees across India earlier this week for allegedly being involved in corrupt practices in exchanging currency post demonetisation.
People who are wailing the most are the ones whose businesses are predicated on tax evasion and that cannot be the viable proposition now, said Sobti.
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