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Master Circular: Loans & Advances – Statutory & Other Restrictions (2010)

No longer current — replaced by Master Circular: Loans & Advances – Statutory & Other Restrictions (2011)
Source: Reserve Bank of India · RBI/2010-11/73 · issued 01 Jul 2010 · ~2 min read
Quick answerRBI consolidated all statutory and regulatory restrictions on loans and advances for scheduled commercial banks (excluding RRBs) as of July 1, 2010. This master circular updates previous instructions and covers restrictions on advances to directors, relatives, officers, sensitive commodities, shares, real estate, and more.

What changed

This master circular updates the previous version dated July 1, 2009 by incorporating all instructions issued up to June 30, 2010. It consolidates the entire set of statutory and regulatory restrictions on loans and advances into a single reference document.

What it means for you

Banks must ensure their lending policies and practices comply with the updated restrictions, including those on advances to directors, relatives, officers, and sensitive sectors like real estate and shares. Non-compliance could attract regulatory action. The circular serves as a one-stop reference for all lending restrictions.

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 scheduled commercial banks (excluding RRBs), Credit and compliance departments, Board of directors and senior management, Loan officers handling retail, corporate, and priority sector advances

❓ Common questions

Regulatory timeline

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

Does this master circular apply to Regional Rural Banks?

No, the circular explicitly excludes Regional Rural Banks (RRBs) from its scope.

What are the key statutory restrictions covered?

Key statutory restrictions include prohibitions on advances against a bank's own shares, advances to bank directors, restrictions on holding shares in companies, and limits on credit for buy-back of securities.

Are there any restrictions on loans to relatives of directors?

Yes, the circular includes regulatory restrictions on granting loans and advances to relatives of directors, as well as to officers and relatives of senior officers.

📜 This document’s life story (2 recorded events, each backed by RBI’s own words)
Superseded by Master Circular: Loans & Advances – Statutory & Other Restrictions (2011)
RBI’s words: “Please refer to the Master Circular DBOD. No. Dir. BC. 13/13.03.00/2010-11 dated July 1, 2010 consolidating the instructions/guidelines”
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1657: DBOD.No.Dir.BC.13/13.03.00/2010-11 — "Master Circular - Loans and Advances - Statutory and Other Restrictions" dated July 1, 2010”
📜 Read the original circular — full text as issued by RBI
RBI/2010-11/73 DBOD.No.Dir.BC.13/13.03.00/2010-11 July 1, 2010 Ashadha10, 19 32 (Saka) All Scheduled Commercial Banks (excluding RRBs) Dear Sir / Madam Master Circular- Loans and Advances – Statutory and Other Restrictions Please refer to the Master Circular DBOD. No. Dir. BC. 13/13.03.00/2009-10 dated July 1, 2009 consolidating the instructions/ guidelines issued to banks till June 30, 2009 relating to statutory and other restrictions on Loans and Advances. The Master Circular has been suitably updated by incorporating the instructions issued up to June 30, 2010 and has been placed on the RBI website ( http://www.rbi.org.in ). A copy of the Master Circular is enclosed. Yours faithfully (A.K.Khound) Chief General Manager Encl:  as above CONTENTS Para No
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/73 · issued 01 Jul 2010. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 03 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=5780&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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