UCB Credit Exposure: Term Loan Outstanding Now Counts
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2005-06/291 · issued 30 Jan 2006 · ~1 min read
Quick answerRBI now allows urban co-operative banks to use the outstanding amount (not the sanctioned limit) for fully drawn term loans when calculating credit exposure limits. No redrawal possible? Use outstanding.
What changed
Previously, UCBs had to use the higher of sanctioned limit or outstanding for credit exposure. Now, for fully drawn term loans with no redrawal option, banks may use only the outstanding amount.
What it means for you
This gives UCBs more headroom in their credit exposure calculations for term loans that are fully disbursed and locked. It reduces the notional exposure, potentially allowing more lending capacity without breaching prudential limits.
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
Identify all fully drawn term loans in your portfolio where no redrawal is possible.
Update your credit exposure monitoring system to use outstanding instead of sanctioned limit for such loans.
Ensure compliance with all other unchanged terms from the April 15, 2005 circular.
Acknowledge receipt of this circular to your respective RBI Regional Office.
Who it affects
Primary (Urban) Co-operative Banks, Credit risk managers at UCBs, Loan operations teams handling term loan portfolios
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 19:13 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Does this apply to all loans or only term loans?
Only fully drawn term loans where no portion of the sanctioned limit can be redrawn. Other loan types still follow the earlier rule of using the higher of sanctioned limit or outstanding.
Do we need to change our reporting to RBI?
No new reporting format is introduced. However, you must update internal systems to reflect the new calculation method and acknowledge receipt of this circular to your Regional Office.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2703: UBD.PCB.Cir.No.29/13.05.000/2005-06 — "Maximum Limit on Advances - Limits on Credit exposure to Individuals / Group of borrowers - UCBs" dated January 30, 200”
📜 Read the original circular — full text as issued by RBI
RBI/2005-06/291
UBD.PCB.Cir.No.29/13.05.000/2005-06
January 30, 2006
The Chief Executive Officers of all Primary (Urban) Co-operative Banks
Dear Sir /Madam,
Maximum limit on Advances – Limits on credit exposure to Individuals/ Group of borrowers - UCBs
Please refer to paragraph 2 (a) of our circular UBD.DS.cir No:44/13.05.00/2004-05 dated April 15, 2005 on the captioned subject in terms of which the sanctioned limit or outstanding whichever is higher shall be reckoned for arriving at credit exposure limit.
2. The matter has been reviewed and it has been decided that in case of fully drawn term loans, where there is no scope for re-drawal of any portion of the sanctioned limit, banks may reckon the outstanding for arriving at credit exposure limit.
3. All other terms and conditions prescribed in the circular under reference remains unchanged.
4. Please acknowledge receipt to the concerned Regional Office of 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/2005-06/291 · issued 30 Jan 2006. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=2719&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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