Home › Circulars › RBI/2005-06/186

UCBs with accumulated losses barred from donations

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2005-06/186 · issued 20 Oct 2005 · ~2 min read
Quick answerRBI clarifies that Primary Urban Co-operative Banks with accumulated losses in their balance sheet cannot make donations or contributions for public/charitable purposes from profits. All other existing conditions from the April 2005 circular remain unchanged.

What changed

RBI issued a clarification on October 20, 2005, adding a new restriction to the existing framework on donations by UCBs. Banks that have accumulated losses in their balance sheet are now explicitly ineligible to make any donations or contributions for public or charitable purposes. All other terms and conditions from the earlier circular dated April 11, 2005 continue to apply.

What it means for you

UCBs must first clear all accumulated losses before they can consider making any donations from profits. This prevents banks with weak financial health from diverting funds to charitable causes, ensuring capital is preserved for recovery and regulatory compliance. Lenders should review their balance sheets and ensure no donations are made while losses remain outstanding.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

All Primary (Urban) Co-operative Banks, Board of Directors and management of UCBs, Compliance and finance teams of UCBs

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Can a UCB with accumulated losses make any donation at all?

No. RBI has clarified that banks with accumulated losses in their balance sheet are not eligible to make any donations or contributions for public or charitable purposes.

Does this circular replace the earlier April 2005 circular on donations?

No. It only adds a new condition. All other terms and conditions from the April 11, 2005 circular remain in force.

What should we do if we have already approved a donation but have accumulated losses?

You should immediately halt the donation and review your balance sheet. Ensure compliance with this circular before proceeding with any payment.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2749: UBD(PCB)/BPD/Cir.15/09.72.000/2005-06 — "Donations / Contributions for Public / Charitable Purposes out of Profits of UCBs" dated October 20, 2005”
📜 Read the original circular — full text as issued by RBI
RBI/2005-06/186 UBD(PCB)/BPD/Cir.15 /09.72.000 /2005-06 October 20, 2005 The Chief Executive Officers of All Primary (Urban) Co-operative Banks Dear Sir/Madam, Donations/Contributions for public/charitable purposes out of profits of UCBs Please refer to our circular UBD(PCB). / BPD/Cir. 43 /09.72.00 /2004-05 dated April 11, 2005 on the captioned subject. 2. In this context, it is clarified that banks carrying accumulated losses in their balance sheet are not eligible to make donations. 3. All other terms and conditions mentioned in the circular under reference will continue to apply. 4. Please acknowledge receipt to the concerned Regional Office of the Reserve Bank of India. Yours faithfully, (N.S.Vishwanathan) Chief General Manger In-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/186 · issued 20 Oct 2005. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2537&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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