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 approved securities.
Investment Policy: UCBs must formulate an investment policy approved by their Board of Directors, which should be reviewed and updated annually.
General Guidelines: UCBs must adhere to the Negotiated Dealing System – Order Matching and ensure that their investments are in line with the prescribed guidelines.
Transactions through SGL Accounts: UCBs must maintain a Subsidiary General Ledger (SGL) account with the Reserve Bank of India and comply with the prescribed rules and penalty provisions.
Engagement of Brokers: UCBs must empanel brokers and ensure that they comply with the prescribed limits and guidelines.
Settlement of Government Securities Transactions: UCBs must settle their government securities transactions through the Clearing Corporation of India Ltd. (CCIL).
Trading of Government Securities: UCBs must trade government securities on the Stock Exchange, Bombay Stock Exchange, or the National Stock Exchange of India Ltd.
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Download: Master Circular on Investments by Primary (Urban) Co-operative Banks