What changed
This master circular supersedes the July 1, 2011 circular, consolidating all instructions on statutory reserves for UCBs issued up to June 30, 2012. It reiterates that scheduled UCBs' CRR is governed by Section 42 of RBI Act (no floor or ceiling since April 1, 2007), while non-scheduled UCBs follow Section 18 of BR Act. SLR maintenance for all UCBs remains under Section 24 of BR Act.
What it means for you
UCBs must ensure strict compliance with the updated consolidated guidelines for CRR and SLR maintenance. The circular emphasizes the need for daily monitoring of liquidity positions through a prescribed register, with CEO oversight. Scheduled UCBs face no statutory floor or ceiling on CRR, giving RBI flexibility to adjust rates for monetary stability.
What you must do
- Maintain daily register of cash reserve and liquid assets as per Annex 8 format, reviewed by CEO daily.
- Ensure scheduled UCBs compute CRR under Section 42 of RBI Act; non-scheduled UCBs under Section 18 of BR Act.
- Verify SLR compliance for all UCBs under Section 24 of BR Act using updated guidelines.
- Update internal policies to reflect the consolidated instructions effective from July 2, 2012.
Who it affects
Primary (Urban) Co-operative Banks (scheduled and non-scheduled), Chief Executive Officers of all UCBs, Compliance and treasury teams at UCBs
What is the key difference in CRR rules for scheduled vs non-scheduled UCBs?
Scheduled UCBs follow Section 42 of RBI Act, 1934, where RBI can set CRR without floor or ceiling since April 1, 2007. Non-scheduled UCBs follow Section 18 of BR Act, 1949 (AACS), which has its own provisions.
Do UCBs need to maintain a daily liquidity register?
Yes, all UCBs must maintain a register as per Annex 8 showing daily cash reserve and liquid asset positions under Sections 18 and 24 of BR Act. This must be reviewed daily by the CEO.
Does this circular change the SLR requirements for UCBs?
No, it consolidates existing SLR rules under Section 24 of BR Act for all UCBs. No new SLR rates or thresholds are introduced in this master circular.