**Summary:**
This Reserve Bank of India (RBI) circular (DCBR.BPD.PCB.Cir.No.0216/20.00.002/2018-19) dated August 16, 2018, modifies regulations regarding investments in Non-SLR (Statutory Liquidity Ratio) securities by Primary Urban Cooperative Banks (UCBs).
The circular amends the previous directive (UBD.PCB.BPD.Cir.No.46/16.20.000/2008-09 dated January 30, 2009) which restricted secondary market transactions for Non-SLR investments to commercial banks and primary dealers.
To harmonize regulations with those of Rural Cooperative Banks, the RBI now permits UCBs to also undertake eligible transactions for the acquisition and sale of Non-SLR investments in the secondary market with mutual funds, pension/provident funds, and insurance companies. This is in addition to the existing permissible counterparties (commercial banks and primary dealers).
These transactions are subject to adherence to the instructions outlined in Para 7 of RBI Master Direction FMRD.DIRD.214.01.002/2017-18 dated August 10, 2017.
All other conditions stipulated in circulars UBD.PCB.BPD.Cir.No.46/16.20.000/2008-09 dated January 30, 2009, and UBD.BPD.PCB.Cir.No.58/16.20.000/2013-14 dated May 07, 2014, remain unchanged.
The circular is addressed to the Chief Executive Officers of all Primary Urban Cooperative Banks. Further inquiries can be directed to the Department of Cooperative Bank Regulation, Central Office, C-7, 1st/2nd Floor, Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051. Phone: 022-26578300/26578100; Fax: 022-26571117; Email: cgmdcbrcorbi.org.in. The Chief General Manager, Neeraj Nigam, signed the circular.
Key Entities Referenced
Reserve Bank of India: The central bank of India, responsible for regulating the banking sector.
Primary Urban Cooperative Banks: A type of cooperative bank in India that is the target audience of this circular.
Non-SLR Securities: Securities that do not qualify as Statutory Liquidity Ratio (SLR) investments for banks.
UBD.PCB.BPD.Cir.No.46/16.20.00/02008-09: A circular issued by the Reserve Bank of India on January 30, 2009, related to investments by Primary Urban Cooperative Banks.
Urban and Rural Cooperative Banks: Cooperative banks in India, operating in urban and rural areas, respectively.
Mutual Funds: A type of investment company that pools money from many investors and invests the money in stocks, bonds, or other assets.
RBI Master Direction FMRD.DIRD.214.01.002/2017-18: A master direction issued by the Reserve Bank of India on August 10, 2017.
Bandra-Kurla Complex, Bandra E, Mumbai, Maharashtra: A business and residential district in Mumbai, Maharashtra, where the Central Office of the Department of Cooperative Bank Regulation is located.
भारतीय �रज़व र् बक�
_______________________RESERVE BANK OF INDIA_______________________
www.rbi.org.in
RBI/2018-19/37
DCBR.BPD.(PCB).Cir.No.02/16.20.000/2018-19 August 16, 2018
The Chief Executive Officers
All Primary (Urban) Co-operative Banks
Madam / Dear Sir,
Investments in Non-SLR Securities by Primary (Urban) Co-operative Banks – Approved
counterparties for secondary market transactions
Please refer to para 2 (iii) (i) of our circular UBD.(PCB).BPD.Cir.No.46/16.20.000/2008-09 dated
January 30, 2009 advising the Primary (Urban) Co-operative Banks (UCBs) that all transactions
for acquisition / sale of non-SLR investments in secondary market may be undertaken only with
commercial banks / primary dealers as counterparties.
2. As a step towards harmonization of regulations for Urban and Rural Co-operative Banks, it
has been decided to permit UCBs to undertake eligible transactions for acquisition / sale of non-
SLR investment in secondary market with mutual funds, pension / provident funds and
insurance companies, in addition to undertaking transactions with commercial banks and
primary dealers, subject to adherence to the instructions contained in Para 7 of RBI Master
Direction FMRD.DIRD.2/14.01.002/2017-18 dated August 10, 2017.
3. All other conditions prescribed in this regard in the circulars UBD.(PCB).BPD.Cir.No.46/
16.20.000/2008-09 dated January 30, 2009 and UBD.BPD.(PCB).Cir.No.58/16.20.000/2013-14
dated May 07, 2014 remain unchanged.
Yours faithfully,
(Neeraj Nigam)
Chief General Manager
सहकारी बक� िविनयमन िवभाग, क��ीय कायार्लय, सी-7, पहली/ दसू री मिंज़ल, बां�ा कुला र्संकुल, बां�ा (पूव)र्, मुंबई – 400 051
फोन: 022 – 26578300/ 26578100 ; फैक्स: 022 - 26571117 ; ई-मेल: cgmdcbrco@rbi.org.in
Department of Co-operative Bank Regulation, Central Office, C-7, 1st/ 2nd Floor, Bandra-Kurla Complex, Bandra (E), Mumbai – 400 051
Phone: 022 – 26578300/ 26578100; Fax: 022 - 26571117; E-mail: cgmdcbrco@rbi.org.in
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