Guarantees
The Reserve Bank of India has outlined guidelines for Urban Co-operative Banks (UCBs) regarding guarantees, co-acceptances, and letters of credit.
Issue of Guarantees: Broad guidelines, purpose, maturity, volume, secured and unsecured guarantees, and deferred payment guarantees are outlined.
Safeguards: Measures to ensure prudent issuance of guarantees, including immediate settlement of cases and correspondence with government departments, are emphasized.
Co-acceptance of Bills
Guidelines for co-acceptance of bills, including irregularities and safeguards, are provided to prevent misuse.
Letters of Credit (LCs)
Guidelines for granting LCs, including those for commodities under selective credit controls, are outlined.
Safeguards: Measures to ensure prudent opening of LCs and immediate settlement of claims are emphasized.
Other Common Guidelines
Common guidelines for credit exposure are provided to ensure prudent banking practices.
Chat with the Master Circular:
Download: Master Circular – Guarantees, Co-Acceptances & Letters of Credit – UCBs