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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Master Circular - Prudential Norms on Capital Adequacy - Primary (Urban) Co-operative Banks (UCBs)

01-Apr-2025 | RBI/2025-2026/09 DOR.CAP.REC.03/09.18.201/2025-26

RBI has issued Master Circular - Prudential Norms on Capital Adequacy - Primary (Urban) Co-operative Banks (UCBs), effective from 1st April 2025.

Key Highlights -
1. The provisions of the Master Circular are applicable to all primary urban co-operative banks (UCBs).
2. Tier 1 UCBs operating in a single district are required to maintain a minimum networth of INR 2 crores. However, All other UCBs (of all tiers) are required to have minimum net worth of INR 5 crore. UCBs not meeting the minimum net worth as specified are required to meet the same in a phased manner and such UCBs shall achieve at least 50% of the total applicable minimum net worth on or before March 31, 2026, and the entire stipulated minimum net worth on or before March 31, 2028.
3. UCBs are required to maintain a minimum Capital to Risk Weighted Assets Ratio (CRAR) at the rate of 9% of Risk Weighted Assets (RWAs)(for Tier 1 UCBs) and at the rate of 12% (for Tier 2 to 4 UCBs).
4. UCBs are permitted to refund the share capital to their members or nominees/heirs of deceased members, on demand, subject to the fulfillment of conditions mentioned in Para 7 of the master circular.
5. UCBs are required to furnish the following annual returns to the Regional Offices-
a. capital funds;
b. conversion of off-balance sheet / non-funded exposures;
c. calculation of risk-weighted assets, and (iv) calculation of capital funds and risk assets ratio
6. The returns shall be submitted in the format as specified in Annexure 5 to the master circular and should mandatorily be signed by two officials who are authorized to sign the statutory returns submitted to
Reserve Bank.

Please refer to the attached document for more information.

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