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.
Statutory Requirements: UCBs must comply with the capital adequacy norms as specified in the Banking Regulation Act, 1949, and the Reserve Bank of India (RBI) guidelines.
Net Worth: UCBs must maintain a minimum net worth of ₹25 lakhs.
Capital Adequacy Norms: UCBs must maintain a minimum capital to risk-weighted assets ratio (CRAR) of 9%.
Tier I Capital: Includes core capital, comprising equity capital and disclosed reserves.
Tier II Capital: Includes supplementary capital, comprising 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 share capital to borrowings.
Refund of Share Capital: UCBs must refund share capital in accordance with RBI guidelines.
Measures for Protection of Investors: UCBs must implement measures to protect investors in regulatory capital instruments.
Returns: UCBs must submit regular returns to the RBI.
Guidelines on Issuance of Preference Shares: UCBs must follow guidelines for issuance of 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)