UCBs: New CSGL Account Eligibility Norms

What changed

Previously, all UCBs were directed to close CSGL accounts of other UCBs. Now, RBI has revised eligibility criteria: only scheduled UCBs meeting a net worth threshold of Rs 200 crore, a CRAR of 10% or more, and operating in states that have signed an MOU with RBI can open and maintain CSGL accounts.

What it means for you

This change tightens access to CSGL facilities, restricting them to stronger, well-capitalised UCBs in compliant states. For other UCBs, this may limit their ability to hold government securities through CSGL accounts, potentially affecting their investment and liquidity management.

What banks were required to do at the time

• Verify if your UCB meets the new eligibility criteria: scheduled status, net worth >= Rs 200 crore, CRAR >= 10%, and state MOU signed.
• If eligible, ensure compliance with the operational guidelines notified in the Gazette of India Extraordinary dated December 2, 2009.
• If not eligible, note that the circular does not specify alternative arrangements; refer to earlier instructions to close CSGL accounts.
• Acknowledge receipt of this circular to your respective Regional Office.

Who it affects

Scheduled urban co-operative banks, Non-scheduled urban co-operative banks, UCBs in states without MOU with RBI, UCBs with net worth below Rs 200 crore or CRAR below 10%