RBI has issued the notification relating to Non-achievement of PSL targets – Prudential treatment of contribution towards eligible funds with NABARD, NHB, SIDBI and MUDRA Ltd.
The following has been stated
Exemption from exposure norms.
It has been decided that the contribution by UCBs towards eligible funds with NABARD, NHB, SIDBI, MUDRA Ltd., or any other entity specified by the RBI, on account of a shortfall in PSL targets, shall not be included while computing the aggregate exposure of a UCB to such counterparties for the purpose of deciding the above prudential exposure limits.
Risk weight
It is further clarified that contribution by UCBs towards above eligible funds on account of shortfall in PSL targets, shall fall under the category of ‘all other assets’, attracting a risk weight of 100 per cent for capital adequacy purposes, in terms of Annexure 1 of the RBI circular dated April 25, 2001 on ‘Application of Capital Adequacy Norms to Urban (Primary) Co-operative Banks.
The above instructions are applicable with immediate effect.
Link – https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12862&Mode=0
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