On Jan. 16, IND RBI issued master circular on exposure norms.
IND RBI issued Master circular - exposure norms and statutory / other restrictions - urban co-operative banks (UCBs), consolidates all existing instructions / guidelines.
Document dated Jan. 16, 2024, received from IND RBI Jan. 17, summarized Jan. 19.
Overview of Master Circular
Emphasizes managing credit risk and limiting exposure to borrowers, specific sectors.
Sets limits on exposure to individual and group borrowers based on tier-I capital.
Mandates a significant portion of loans to be of smaller value, within specified limits.
Specifies ceilings on loans for housing, real estate, and commercial real estate.
UCBs to be guided by master direction on investment portfolio of UCBs, see #170217.
Details limits on unsecured loans based on the bank's financial parameters.
Includes restrictions on advances against bank shares and loans to directors and their relatives; the credit card limits are governed by specific IND RBI directions.
Jul. 2024 Notification of Amendment
On Jul. 25, 2024, IND RBI said the UCBs were advised to keep the total of all loans against shares as well as debentures within a limit of 20% of their owned funds.
IND RBI decided limit of 20% shall be linked to the tier-I capital of the bank as of Mar. 31 of previous financial year; the change will be effective from Jan. 1, 2025.
Regulators
IND RBI
Entity Types
Bank
Reference
Nt RBI/2024-25/54, DOR.CRE.REC.29/07.10.002/2024-25, 7/25/2024; Cir RBI/2023-24/114, DoR.CRE.REC.71/07.10.002/2023-24, 1/16/2024; ESG; MCir RBI/2015-16/45, DCBR.CO.BPD. (PCB) MC No.13/13.05.000/2015-16, 7/1/2015
