**Policy Summary: RBI/2024-25/54 DOR.CRE.REC.2907/10.002/2024-25**
**Subject:** Bank Finance against Shares and Debentures for Primary Urban Cooperative Banks (UCBs)
**Issuing Authority:** Reserve Bank of India (RBI), Department of Regulation
**Date of Issuance:** July 25, 2024
**Purpose:** To revise the ceiling on UCBs' loans against the security of shares and debentures.
**Key Change:** The aggregate limit for all loans against shares and debentures, previously capped at 20% of owned funds, will now be linked to the bank's Tier I capital as of March 31st of the previous financial year. Tier I capital is defined in the Master Circular "Prudential Norms on Capital Adequacy - Primary Urban Cooperative Banks (UCBs)" dated April 1, 2024, as amended.
**Effective Date:** January 1, 2025.
**Previous Circulars Referenced:** 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.
**Contact Information:** Vaibhav Chaturvedi, Chief General Manager, Department of Regulation, Central Office, Central Office Building, 12th-13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai - 400001. Tel No: 22661602, 22601000; Fax No: 022-2270 5691.
**Note:** All other provisions of the previously mentioned circulars remain unchanged.
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, also referred to as UCBs.
UBD.No.DS.PCB.CIR.1613.05.00200102 dated October 22, 2001: A circular issued by the Reserve Bank of India regarding bank finance against shares and debentures.
Master Circular Exposure Norms and Statutory Other Restrictions UCBs dated January 16, 2024: A master circular issued by the Reserve Bank of India pertaining to exposure norms and statutory restrictions for Urban Cooperative Banks.
Tier I capital: A component of a bank's capital adequacy, as defined by the Reserve Bank of India.
Master Circular Prudential Norms on Capital Adequacy Primary Urban Cooperative Banks UCBs dated April 1, 2024: A master circular issued by the Reserve Bank of India pertaining to capital adequacy norms for Primary Urban Cooperative Banks.
Vaibhav Chaturvedi: Chief General Manager at Reserve Bank of India.
Mumbai, Maharashtra: City in India, location of the Central Office of 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