Prudential Norms on Capital Adequacy for Primary (Urban) Co-operative Banks (UCBs)
This Master Circular outlines the prudential norms on capital adequacy for Primary (Urban) Co-operative Banks (UCBs) in India.
The circular covers various aspects, including:
Statutory Requirements: UCBs must comply with the statutory requirements prescribed by the Reserve Bank of India.
Net Worth: UCBs must maintain a minimum net worth as prescribed by the RBI.
Capital Adequacy Norms: UCBs must maintain a minimum capital adequacy ratio, comprising Tier I and Tier II capital.
Tier I Capital: Includes core capital, such as equity shares, statutory reserves, and disclosed free reserves.
Tier II Capital: Includes supplementary capital, such as undisclosed reserves, revaluation reserves, and hybrid instruments.
Capital for Market Risk: UCBs must maintain additional capital for market risk.
Share Linking to Borrowings: UCBs must link their share capital to borrowings.
Refund of Share Capital: UCBs must refund share capital in accordance with the RBI’s guidelines.
Measures for Protection of Investors: UCBs must implement measures to protect investors in regulatory capital instruments.
Returns: UCBs must submit returns to the RBI as prescribed.
Annex 3: Guidelines on Issuance of Preference Shares: Provides guidelines for the issuance of preference shares, including perpetual non-cumulative preference shares (PNCPS) eligible for inclusion in Tier-I capital.
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Download: Master Circular – Prudential Norms on Capital Adequacy – Primary (Urban) Co-operative Banks (UCBs)