**Policy Summary: RBI/2024-25/54 - Bank Finance Against Shares and Debentures for Primary Urban Cooperative Banks (UCBs)**
This circular, issued by the Reserve Bank of India (RBI) on July 25, 2024, revises the guidelines concerning bank finance against shares and debentures for Primary Urban Cooperative Banks (UCBs). The circular modifies the existing regulation outlined in circular UBD.No.DS.PCB.CIR.1613/05.002/2001-02 dated October 22, 2001, and para 6.6.5 of Master Circular on Exposure Norms and Statutory/Other Restrictions UCBs dated January 16, 2024.
The key change is that the aggregate ceiling for all loans against the security of shares and debentures, previously set at 20% of owned funds, will now be linked to the Tier I capital of the bank. This Tier I capital will be calculated as of March 31st of the previous financial year, as defined in the Master Circular on Prudential Norms on Capital Adequacy for Primary Urban Cooperative Banks (UCBs) dated April 1, 2024, as amended.
This revised regulation will take effect from January 1, 2025. All other related provisions of the previously mentioned circulars remain unchanged.
For further information, contact Vaibhav Chaturvedi, Chief General Manager, Department of Regulation, Central Office, Central Office Building, 12th/13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001. Telephone numbers: 22661602, 22601000. Fax number: 022-2270 5691.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking system.
Primary Urban Cooperative Banks: A type of banking institution in India that operates primarily in urban areas and is cooperatively owned.
UBD.No.DS.PCB.CIR.16/13.05.002/2001-02: Reference to a circular issued by the Reserve Bank of India concerning urban cooperative banks.
Master Circular Exposure Norms and Statutory Other Restrictions UCBs: A master circular issued by RBI outlining exposure norms and statutory restrictions for Urban Cooperative Banks.
Master Circular Prudential Norms on Capital Adequacy Primary Urban Cooperative Banks UCBs: A master circular issued by RBI outlining prudential norms on capital adequacy for Primary Urban Cooperative Banks.
Tier I capital: A component of a bank's capital that includes disclosed reserves and equity.
Mumbai, Maharashtra: The city where the central office of the Department of Regulation, Reserve Bank of India, is located.
Vaibhav Chaturvedi: Chief General Manager at the Reserve Bank of India.
भारतीय �रज़वर् बैंक
RESERVE BANK OF INDIA
RBI/2024-25/54
DOR.CRE.REC.29/07.10.002/2024-25 July 25, 2024
All Primary (Urban) Co-operative Banks
Madam / Dear Sir,
Bank Finance against Shares and Debentures
Please refer to the circular UBD.No.DS.PCB.CIR.16/13.05.00/2001-02 dated October
22, 2001 and para 6.6.5 of Master Circular - Exposure Norms and Statutory / Other
Restrictions – UCBs dated January 16, 2024, in terms of which Primary (Urban) Co-
operative Banks (UCBs) were advised that the aggregate of their all loans against the
security of shares and debentures should be within the overall ceiling of 20 per cent
of their owned funds.
2. On a review, it has been decided that the aforementioned overall ceiling of 20 per
cent shall be linked to Tier I capital of the bank as on 31st March of the previous
financial year, as defined in Master Circular - Prudential Norms on Capital Adequacy
- Primary (Urban) Co-operative Banks (UCBs) dated April 1, 2024, as amended from
time to time.
3. The change stipulated at paragraph 2 above shall be effective from January 01,
2025. All other related provisions of the aforesaid circulars remain unchanged.
Yours faithfully,
(Vaibhav Chaturvedi)
Chief General Manager
__________________________________________________________________
िविनयमन िवभाग, क��ीय कायार्लय, क��ीय कायार्लय भवन, 12व�/ 13व� मंिज़ल, शहीद भगत �संह माग,र् फोटर्, मुंबई - 400001
टेलीफोन/ Tel No: 22661602, 22601000 फैक्स/ Fax No: 022-2270 5691
Department of Regulation, Central Office, Central Office Building, 12th/ 13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001
�हदं ी आसान ह,ै इसका �योग बढ़ाइए