**Policy Summary: Investment in Umbrella Organization by Primary Urban Cooperative Banks**
This circular, DOR.REC.MRG.9016/20.00.002/2021-22, issued by the Reserve Bank of India (RBI) on March 3, 2022, addresses investments by Primary Urban Cooperative Banks (UCBs) in an Umbrella Organization (UO). Specifically, it pertains to the circular UBD.PCB.BPD.Cir.No.46/16.20.00/2008-09 dated January 30, 2009, concerning investments in Non-SLR securities by UCBs.
The key provision of this new circular is to exempt investments made by UCBs to subscribe to the capital of the UO, for the purpose of acquiring membership, from the limits prescribed in Paragraphs 2(i) and 2(iii)b of the January 30, 2009 circular. These paragraphs limit non-SLR investments to ten percent of a bank's total deposits as of March 31 of the previous year and restrict investments in unlisted securities to no more than ten percent of total non-SLR investments at any time.
This exemption is granted in light of the RBI's regulatory approval in June 2019 to the National Federation of Urban Cooperative Banks and Credit Societies Ltd. (NAFCUB) for the formation of a UO for the UCB sector, which permits UCBs to voluntarily subscribe to the capital of the UO.
The circular is applicable to all Primary Urban Cooperative Banks and takes effect immediately from March 3, 2022.
For further information, contact Usha Janakiraman, Chief General Manager, Department of Regulation, Central Office, Reserve Bank of India, 12th and 13th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai – 400 001. Telephone: 022-2260 1000; Fax: 022-2270 5691; email: cgmicdor@rbi.org.in. Website: www.rbi.org.in.
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 cooperative bank in India that primarily serves urban areas.
Umbrella Organization: An organization (UO) formed to support and strengthen the UCB sector.
National Federation of Urban Cooperative Banks and Credit Societies Ltd.: NAFCUB, an organization that received regulatory approval from RBI to form an Umbrella Organization (UO) for the UCB Sector.
Mumbai, Maharashtra: City in India, location of the Central Office of the Reserve Bank of India, where the circular was issued.
UBD.PCB.BPD.Cir.No.46/16.20.00/02008-09: A circular issued by the Reserve Bank of India regarding investments in Non-SLR securities by Primary Urban Cooperative Banks.
Non-SLR securities: Securities that do not qualify as Statutory Liquidity Ratio (SLR) investments for banks.
Usha Janakiraman: Chief General Manager at Reserve Bank of India. Signed the circular.
भारतीय �रज़व� ब�क
________________________RESERVE BANK OF INDIA________________________
www.rbi.org.in
RBI/2021-22/177
DOR.REC.MRG.90/16.20.000/2021-22 March 3, 2022
Madam / Dear Sir,
’
Investment in Umbrella Organization (UO) by Primary (Urban) Co-operative
Banks
Please refer to circular UBD.(PCB).BPD.Cir.No.46/16.20.000/2008-09 dated January
30, 2009 on Investments in Non-SLR securities by Primary (Urban) Co-operative
Banks. Paragraph 2(i) of the circular states that the non-SLR investments shall be
limited to ten per cent of a bank’s total deposits as on March 31 of the previous year.
Further, paragraph 2(iii)(b) states that investments in unlisted securities shall not
exceed ten per cent of the total non-SLR investments at any time.
2. RBI has accorded regulatory approval to National Federation of Urban Co-operative
Banks and Credit Societies Ltd. (NAFCUB) in June 2019 for formation of Umbrella
Organization (UO) for the UCB Sector. The approval inter-alia permits UCBs to
subscribe to capital of the UO on voluntary basis.
3. It is advised that the investment made for subscribing to the capital of the UO, for
acquiring its membership, shall be exempt from the limits prescribed in Paragraphs 2(i)
and 2(iii)(b) of the circular ibid.
Applicability
4. This circular is applicable to all Primary (Urban) Co-operative Banks.
5. These instructions come into effect from the date of the circular.
Yours faithfully
(Usha Janakiraman)
Chief General Manager
िविनयमन िवभाग,क�द्रीय काया�लय, 12 वी ंऔर 13 वी ंमंिजल, क�द्रीय काया�लय भवन, शहीद भगत िसंह माग�,फोट�,मुंबई-400001
दूरभाष: 022-22601000 फै�: 022-22705691 ई-मेल: cgmicdor@rbi.org.in
____________________________________________________________________________________________________________________________________
Department of Regulation, Central Office, 12th and 13th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai- 400 001
Tel: 022- 2260 1000 Fax: 022-2270 5691 email: cgmicdor@rbi.org.in
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