What changed
RBI notified the inclusion of United Overseas Bank Ltd in the Second Schedule to the RBI Act, 1934, via a notification dated March 26, 2010, published in the Gazette of India on April 24, 2010. The notification reference is DBOD.IBD.No.16919/23.03.020/2009-10.
What it means for you
For Indian banks, this means United Overseas Bank Ltd now qualifies as a scheduled bank, eligible for RBI's refinance and liquidity windows. It also implies that this foreign bank must maintain statutory reserves (CRR/SLR) as per RBI norms, impacting interbank operations and competition.
What you must do
- Update your internal records to reflect United Overseas Bank Ltd as a scheduled bank for regulatory reporting.
- Review interbank exposure limits and counterparty risk assessments for this bank.
- Ensure compliance with CRR/SLR maintenance requirements if you have dealings with this bank.
- Monitor any changes in liquidity or settlement arrangements with this newly scheduled entity.
Who it affects
All scheduled commercial banks in India, United Overseas Bank Ltd (now a scheduled bank), Interbank market participants
What does inclusion in the Second Schedule mean for United Overseas Bank Ltd?
It means the bank is now a scheduled bank under the RBI Act, 1934, entitling it to borrow from RBI, access clearing houses, and maintain statutory reserves. It also gains credibility and regulatory recognition.
Does this change affect other banks' operations with United Overseas Bank Ltd?
Yes, other banks must now treat it as a scheduled bank for exposure limits, CRR/SLR calculations, and interbank transactions. It may also impact liquidity management and reporting.
When did this inclusion become effective?
The inclusion was effective from March 26, 2010, as per RBI notification DBOD.IBD.No./16919/23.03.020/2009-10, published in the Gazette of India on April 24, 2010.