New EU Sanctions on Russia Come into Effect

New sanctions imposed by the European Union against Russia have come in to effect.

The sanctions aim at putting pressure on Russia to comply with the truce reached last week between the Ukraine government forces and rebels.

As per the new sanctions, EU nationals and companies cannot provide loans to the five major Russian state owned banks. They are Sberbank, VTB Bank, Gazprombank, Vnesheconombank (VEB) and Russian Agriculture Bank (Rosselkhozbank), reports Reuters.

Trade in new bonds or equities issued by the banks and with a maturity period of more than 30 days has also been banned.

The EU decision will also restrict Russian oil and defense companies from conducting business with the European Union countries, reports BBC.

Russian oil companies, Rosneft and Transneft, will be mainly affected by the measures. However, it will particularly affect Rosneft, which had asked for a loan from the Russian government last month.

The new sanctions also add 24 more Russian official and rebel leader's to the blacklist. This will bring the total number of persons subject to sanctions to 119.

"They comprise persons involved in actions against Ukraine's territorial integrity, including the new leadership in Donbass, the government of Crimea as well as Russian decision-makers and oligarchs," said a statement from the EU Council, , reports BBC.

The European Council President Herman Van Rompuy said that EU officials would evaluate by this month end whether the ceasefire agreement between Ukraine and the rebels was working. He said that if Russia was abiding by the agreement, some or all sanctions could be lifted, reports Reuters.

Meanwhile, Kremlin spokesman Dmitry Peskov said that the new sanctions were illegal.

 "Today's actions are completely beyond understanding and explanation amid...Russia's efforts to facilitate the end of the bloodshed and to ensure a peaceful resolution of the conflict in eastern Ukraine," he said, reports The Wall Street Journal.

In retaliation, Russia may ban European passenger planes from using its airspace. The imports of used cars and some textiles may also be affected.