The Reserve Bank of India has advised that the investment made for subscribing to the capital of the Umbrella Organization (UO) of the UCB sector, for acquiring its membership, shall be exempt from the limits prescribed in paragraphs 2(i) and 2(iii)(b) of the circular dated January 30, 2009, on ‘Investments in Non-SLR securities by primary (urban) co-operative banks’.
Paragraph 2(i) of the said circular states that the non-SLR investments shall be limited to 10% of a bank’s total deposits as on March 31 of the previous year. Further, paragraph 2(iii) (b) states that investments in unlisted securities shall not exceed 10% of the total non-SLR investments at any time.
RBI has accorded regulatory approval to National Federation of Urban Co-operative Banks and Credit Societies Ltd. (NAFCUB) in June 2019 for formation of UO for the UCB sector. The approval inter-alia permits UCBs to subscribe to capital of the UO on voluntary basis.
