SC: Menstrual Health is a Fundamental Right under Article 21; Orders Free Sanitary Pads in Schools  ||  Supreme Court: Industrial Court is the Proper Forum to Decide Issues Relating to Contract Labour  ||  Supreme Court: Only Civil Court of Original Jurisdiction Can Extend Arbitral Tribunal’s Mandate  ||  SC: Demolition of Private Property Must Rest on Clear Statutory Grounds and Due Consideration  ||  SC: After Complaint Was Withdrawn, BCI Disciplinary Committee Could Not Penalise Advocate  ||  MP HC: Decree Holder Cannot Defeat Compromise or Initiate Execution by Refusing Debtor’s Cheque  ||  MP HC: Spouse’s Income Cannot Be Clubbed With Public Servant’s for Disproportionate Assets Case  ||  Ker HC: Bar Association is Not Employer & Cannot Form Internal Complaints Committee under POSH Act  ||  SC: Ex-Contract Workers Must Be Preferred When Employers Replace Contract Labour With Regular Staff  ||  SC: Waqf Tribunals Cannot Hear Claims over Properties Not Listed or Registered under Waqf Act    

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 2026 - All Rights Reserved