With India-Iran trade at standstill, banks set to lose low cost deposits

For about last six months, India has stopped importing oil from Iran, and thus oil companies have stopped depositing money to the designated banks

The coronavirus scare has led to a near-standstill of trade between India and Iran.
 
Apart from exporters, the two lending entities — UCO Bank and IDBI Bank — which enable the payment mechanism for this bilateral trade, will also be hit, since they will lose on a pool of low-cost deposits. A top official of UCO Bank said the deposits on account of the special mechanism put in place for trade with Iran had already substantially reduced — the bank would be able to extend the support till funds were available.
 
This is a double whammy for exporters,