Investments by Primary (Urban) Co-operative Banks
This Master Circular outlines the guidelines and restrictions for investments by Primary (Urban) Co-operative Banks (UCBs).
Restrictions on Holding Shares: UCBs are prohibited from holding shares in other co-operative societies, except with the prior approval of the Reserve Bank of India.
Statutory (SLR) Investments: UCBs must maintain a minimum Statutory Liquidity Ratio (SLR) of 18% of their Net Demand and Time Liabilities (NDTL) in the form of cash, gold, and unencumbered securities.
Investment Policy: UCBs must formulate and implement an investment policy approved by their Board of Directors, which should include guidelines for investment, risk management, and exposure limits.
General Guidelines: UCBs must adhere to the Negotiated Dealing System – Order Matching for transactions in government securities and follow the guidelines for transactions through SGL accounts, including maintenance of SGL forms and compliance with control, violation, and penalty provisions.
Engagement of Brokers: UCBs must deal through empaneled brokers and adhere to broker limits to ensure transparency and risk management.
Settlement of Government Securities Transactions: UCBs must settle government securities transactions through the Clearing Corporation of India Ltd. (CCIL).
Trading of Government Securities: UCBs must trade government securities on the Stock Exchange or through the Negotiated Dealing System – Order Matching.
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Download: Master Circular on Investments by Primary (Urban) Co-operative Banks