The Reserve Bank of India has decided to make the RBI (Financial Statements-Presentation and Disclosures) Directions, 2021 (Master Direction) applicable to state cooperative banks (StCBs) and central cooperative banks (DCCBs). Hitherto, these directions were applicable only to commercial banks and primary urban cooperative banks (UCBs). They harmonize the regulatory instructions on presentation and disclosure in financial statements across the banking sector.
The RBI has taken the decision in consultation with the National Bank for Agriculture and Rural Development (NABARD). The Master Direction shall apply to state and central cooperative Banks (together referred to as rural cooperative banks or RCBs) mutatis mutandis, unless explicitly specified otherwise, from the financial year ending March 31, 2023.
In terms of the provisions of section 29 read with section 56 of the Banking Regulation Act, 1949, cooperative banks shall in respect of all business transacted by them prepare a balance sheet and profit and loss account as on the last working day of the year or the period, as the case may be, in the forms set out in the third schedule of the Banking Regulation Act, 1949.
Inter-branch account
Banks should segregate the credit entries outstanding for more than five years in the inter-branch account and transfer them to a separate ‘blocked account’ which should be shown under ‘other liabilities and provisions – others’ or in the case of cooperative banks, under ‘other liabilities- suspense’. Any adjustment from the blocked account should be permitted only with the authorisation of two officials, one of whom should be from the controlling/head office if the amount exceeds Rs 1 lakh. The balance in blocked account shall be reckoned as a liability for the purpose of the maintenance of cash reserve ratio (CRR) and statutory liquidity ratio (SLR).
The RBI has updated the relevant details on its website.
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