Page 50 - Banking Finance September 2018

RBI CIRCULAR

RBI/2018-19/38 UBD.(PCB).BPD.Cir.No.46/16.20.000/2008-09 dated
August 16, 2018 January 30, 2009 advising the Primary (Urban) Co-
operative Banks (UCBs) that all transactions for

1. Please refer to our circular UBD.BPD.(SCB).Cir.No.1/ acquisition / sale of non-SLR investments in secondary
16.27.000/2014-15 dated October 29, 2014 regarding market may be undertaken only with commercial banks
Introduction of Liquidity Adjustment Facility (LAF) for / primary dealers as counterparties.
Scheduled Primary (Urban) Co-operative Banks (UCBs). 2. As a step towards harmonization of regulations for
2. In this connection, it has been decided that with effect Urban and Rural Co-operative Banks, it has been
from August 20, 2018, LAF will also be extended to decided to permit UCBs to undertake eligible
Scheduled State Co-operative Banks (StCBs) which are transactions for acquisition / sale of non-SLR investment
CBS enabled and have CRAR of at least 9 percent. in secondary market with mutual funds, pension /
provident funds and insurance companies, in addition
3. Further, in order to provide an additional window for
to undertaking transactions with commercial banks and
liquidity management over and above what is available primary dealers, subject to adherence to the
under LAF, it has also been decided that with effect from instructions contained in Para 7 of RBI Master Direction
August 20, 2018, Marginal Standing Facility (MSF) will
FMRD.DIRD.2/14.01.002/2017-18 dated August 10,
be extended to Scheduled UCBs and Scheduled StCBs
2017.
which are CBS enabled and have CRAR of at least 9
percent. 3. All other conditions prescribed in this regard in the
circulars UBD.(PCB).BPD.Cir.No.46/16.20.000/2008-09
4. The terms and conditions for availing LAF and MSF
dated January 30, 2009 and UBD.BPD.(PCB).Cir.No.58/
would be as per the instructions issued by Financial 16.20.000/2013-14 dated May 07, 2014 remain
Markets Operation Department (FMOD) of the Reserve unchanged.
Bank of India from time to time.
5. The names of such Scheduled Co-operative Banks which Yours faithfully,
meet the eligibility norms to participate in LAF and MSF (Neeraj Nigam)
(Positive List), and of those Scheduled Co-operative Chief General Manager
Banks found ineligible (Negative List) will be
communicated shortly to the FMOD by Department of Maintenance of CRR/SLR on Foreign
Co-operative Bank Regulation (DCBR) under intimation Currency Assets/Liabilities- Reference
to the banks concerned.
rate for INR/USD and exchange rate of
6. The eligibility status of the banks in the Positive List will
be reviewed on an ongoing basis to ensure that the other major currencies
CRAR requirement is being complied with.
RBI/2018-19/34
Yours faithfully, August 02, 2018
(Neeraj Nigam)
Chief General Manager 1. Please refer to our circular DBOD.No.Ret.BC.113/
12.01.001/2011-12 dated June 29, 2012 on
Investments in Non-SLR Securities by Maintenance of CRR on FCNR(B) Scheme advising banks
Primary (Urban) Co-operative Banks - to be guided by the reference rate announced on the
Reserve Bank's website for converting foreign assets/
Approved counterparties for secondary deposits into INR for reporting in Form 'A' Return.
market transactions 2. Financial Benchmarks India Private Limited (FBIL) has
taken over the process of computing and disseminating
RBI/2018-19/37
reference rate for INR/USD and exchange rate for the
August 16, 2018 other major currencies with effect from July 10, 2018.

1. Please refer to para 2 (iii) (i) of our circular 3. In this connection, we advise that banks shall use the

50 | 2018 | SEPTEMBER | BANKING FINANCE