RBI/2004-05/430
UBD(PCB). CIR.No. 45/13.05.00/04-05 April 19, 2005 The Chief Executive Officers of All Primary (Urban) Co-operative Banks Dear Sir/Madam, Loans and advances to directors etc- directors as surety/gurantors- Clarification-UCBs Please refer to our circular UBD.PCB.CIR.10/13.05.00/04-05 dated August 7, 2004 advising UCBs that the directors and relatives cannot stand as surety/guarantor to the loans and advances (both secured and unsecured) sanctioned by the UCBs. 2.In this connection, we clarify that banks which have granted loans and advances against the guarantee/surety of the directors and/or their relatives prior to October 1, 2003 may not unwind the position and may continue with the guarantee /surety of the directors and /or their relatives till the maturity of the facility. However, as conveyed in our above circular no fresh borrowal arrangements should be allowed by UCBs with the guarantees/surety of their directors and /or their relatives. 3.Please acknowledge receipt to the concerned Regional Office of RBI. Yours faithfully, sd/- (N.S.Vishwanathan) Chief General Manager
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