All HC: Municipal Corp. to Ensure Availability of Clean Drinking Water to Residents of Lucknow  ||  Bom. HC: Bail Granted to Accused Who Wasn’t Produced Before Court on Seventy Previous Dates  ||  Delhi HC Seeks Explan. from Legal Services Committee on Failure to Assist Litigant Despite Requests  ||  Hemant Soren, Former CM of Jharkhand Moves SC After HC Dismissed Challenge to His Arrest by ED  ||  CESTAT: No Provision in Cenvat Credit Rules to Allow Cash Refund of Cess in Cenvat Credit Balance  ||  Delhi High Court: Parents to Bear Cost of Air Conditioning Services in Schools  ||  Ker. HC: Declining a Rape Victim to Terminate Pregnancy Violates Right to Live With Dignity  ||  SC: Can’t Apply Section 498A IPC Mechanically in All Cases of Ill-Treatment by Husband  ||  SC: To Summon Person u/s 319 CrPC as Additional Accused, Stronger Evidence is Needed  ||  SC: Trial Judges Should Take Participatory Role in Trial & Not Act as Mere Tape Recorders    

Provisioning on interbank exposure of Primary (Urban) Co-operative Banks (UCBs) under All Inclusive Directions- (Reserve Bank of India) (20 Apr 2020)

MANU/RMIC/0071/2020

Banking

1. As you are aware, the imposition of All-inclusive Directions (AID) on an Urban Co-operative Bank (UCB), inter alia, restricts the bank from discharging its liabilities except as permitted by RBI. This impacts the withdrawal of interbank deposits placed by other UCBs with such bank as also timely discharge of interbank exposures such as discounted bills drawn under Letter of Credit (LC) issued by the UCB under AID.

2. In order to ensure that such exposures are objectively recognised in the financial statements of UCBs and also with a view to addressing the systemic impact of provisioning requirements on such exposures, it has been decided as under:

a. The interbank exposures arising from deposits placed by UCBs with a UCB under AID and their non-performing exposures arising from discounted bills drawn under LCs issued by a UCB under AID shall be fully provided within five years at the rate of 20% annually. Further, the interest receivable on the deposits shall not be recognised as income by the UCBs.

b. If the UCBs choose to convert such deposits into long term perpetual debt instruments (e.g. Innovative Perpetual Debt Instrument - IPDI) which may be recognised as capital instrument under a scheme of restructuring/ revival of a UCB under AID, provision on the portion of deposits converted into such instruments shall not be required.

3. The above instructions will come into force with immediate effect.

Tags : PROVISIONING   INTERBANK EXPOSURE   UCBS  

Share :        

Disclaimer | Copyright 2024 - All Rights Reserved