Guarantees
The Reserve Bank of India has outlined guidelines for Urban Co-operative Banks (UCBs) regarding the issuance of guarantees. These guidelines cover the purpose, maturity, volume, and types of guarantees, including secured, unsecured, and deferred payment guarantees.
UCBs must exercise caution when issuing guarantees, especially for commodities covered under selective credit controls. They must also ensure immediate settlement of cases and obtain certified copies of judgments in a timely manner.
Co-acceptance of Bills
The circular highlights the importance of adhering to guidelines for co-acceptance of bills, emphasizing the need to avoid irregularities and exercise necessary safeguards.
Letters of Credit (LCs)
The RBI has provided guidelines for UCBs to grant LC facilities, including those for commodities covered under selective credit controls. UCBs must exercise caution when opening LCs and ensure timely payment under these facilities.
Chat with the Master Circular:
Download: Master Circular – Guarantees, Co-Acceptances & Letters of Credit – UCBs