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SLR Treatment for Salary Earners UCB Deposits Extended

Current · Source: Reserve Bank of India · RBI/2008-09/200 · issued 30 Sep 2008 · ~2 min read
Quick answerRBI extends compliance deadline for Salary Earners Urban Co-operative Banks to March 31, 2009, on deducting loans availed from DCCB/SCB from deposits when counting those deposits as SLR.
The rule, in the simplest words
How it plays out — a real example

A treasury officer in Indore, working at a Salary Earners Urban Co-operative Bank, needs to update their SLR computation to correctly deduct a loan taken from a DCCB. They review their internal processes to automatically flag such loan-deposit relationships for SLR calculation, ensuring compliance with the RBI's instructions by the new deadline of March 31, 2009.

What changed

RBI reviewed representations from Salary Earners Co-operative Banks citing difficulties in implementing earlier instructions on SLR treatment of deposits with DCCBs/SCBs. The regulator granted a further extension of time until March 31, 2009, for these banks to comply with the requirement that loans availed from DCCB/SCB be deducted from deposits (regardless of lien marking) for SLR reckoning.

What it means for you

Salary Earners Urban Co-operative Banks get additional breathing room to adjust their SLR compliance processes without immediate penalty. For other UCBs, the original rule remains unchanged: any loan taken from a DCCB/SCB where deposits are held must reduce the deposit amount considered for SLR, even if no formal lien exists. Banks should use this extended period to align systems and avoid SLR shortfalls.

What you must do

Who it affects

Salary Earners Primary (Urban) Co-operative Banks, All Urban Co-operative Banks maintaining deposits with DCCBs/SCBs, DCCBs and SCBs that extend loans to UCBs

❓ Common questions

Does this extension apply to all Urban Co-operative Banks or only Salary Earners banks?

The extension is specifically granted to Salary Earners Co-operative Banks. Other UCBs must continue to comply with the original instructions without any deadline relaxation.

What happens if a Salary Earners bank fails to comply by March 31, 2009?

The circular does not specify penalties, but non-compliance would mean such deposits cannot be counted as SLR, potentially leading to SLR shortfall and regulatory action.

Does the lien marking on deposits affect the SLR treatment?

No. The circular clearly states that the loan amount must be deducted from deposits for SLR purposes 'irrespective of whether lien has been marked on such deposits or not.'

📜 Read the original circular — full text as issued by RBI
RBI/2008-09/200 UBD.CO. BPD. (PCB).  No. 20 /12.05.001/2008-09 September 30, 2008 Chief Executive Officers All Salary Earners Primary (Urban) Co-operative Banks Dear Sir / Madam, Treatment of deposits with DCCB / SCB as SLR Please refer to our circular UBD. CO. BPD. (PCB) No. 17 / 12.05.001 / 2007-08 dated September 20, 2007 on the captioned subject advising urban co-operative banks that when loan is availed from DCCB / SCB with which the UCB maintains deposits, the amount of loan availed would be deducted from the deposits irrespective of whether lien has been marked on such deposits or not, for the purpose of reckoning such deposits as SLR.. 2. The matter has been reviewed on the basis of representations received for grant of extension of time to the Salary Earners Co-operative Banks for complying with the requirements prescribed therein. Considering the nature and membership profile of the Salary Earners Co-operative Banks and the difficulties expressed in the implementation of our instructions, it has been decided to grant a further extension of time upto March 31, 2009 to comply with our instructions. Please acknowledge receipt to the Regional office concerned. Yours faithfully, (A. K. Khound) Chief General Manager In-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2008-09/200 · issued 30 Sep 2008. The plain-English explanation above is BankPulse’s own independent summary.
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Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Salary Earners Primary (Urban) Co-operative Banks, All Urban Co-operative Banks maintaining deposits with DCCBs/SCBs, DCCBs and SCBs that extend loans to UCBs), your first concrete step on “SLR Treatment for Salary Earners UCB Deposits Extended” is: “Ensure your bank's SLR computation correctly deducts any loan availed from DCCB/SCB from corresponding deposits, irrespective of lien marking.” (RBI issued this 30 Sep 2008).

  1. Circular: RBI/2008-09/200 -- SLR Treatment for Salary Earners UCB Deposits Extended
  2. Issued: 30 Sep 2008
  3. Action required: Ensure your bank's SLR computation correctly deducts any loan availed from DCCB/SCB from corresponding deposits, irrespective of lien marking.
  4. Action required: If you are a Salary Earners Co-operative Bank, update your compliance timeline to meet the new deadline of March 31, 2009.
  5. Action required: Review and adjust internal processes to automatically flag such loan-deposit relationships for SLR calculation.
  6. Action required: Acknowledge receipt of this circular to your respective Regional Office as instructed.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4522&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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