March
7, 2008
The Chief Executives of
all Primary( Urban) Cooperative
Banks
Dear Sir/Madam,
Classification
of UCBs for Regulatory Purposes - Revised Norms
As
you are aware, banks are being categorized for regulatory purposes as under:
(a)
Tier I Banks: Unit banks i.e. banks having a single branch / HO with deposits
up to Rs. 100 crore and banks having multiple branches within a single district
with deposits up to Rs. 100 crore
(b) Tier II Banks:
All other banks.
2. Based on the representations received
from the UCB sector, it has been decided to amend the definition of Tier I banks
and accordingly banks may be classified in Tier I category for regulatory purposes
as under:
(a) Tier I banks :
i)
Unit banks i.e. banks having a single branch / Head Office and banks with deposits
below Rs.100 crore, whose branches are located in a single district.
ii)
Banks with deposits below Rs.100 crore having branches in more than one district,
provided the branches are in contiguous districts and deposits and advances
of branches in one district separately constitute at least 95% of the total
deposits and advances respectively of the bank.
iii) Banks
with deposits below Rs.100 crore, whose branches were originally in a single district
but subsequently, became multi-district due to reorganization of the district.
(b)
Tier II Banks: All other banks.
As hitherto, the
deposit base of Rs. 100 crore will be determined on the basis of average of the
fortnightly Net Demand and Time Liabilities in the financial year concerned. Similarly,
advances will be determined on the basis of fortnightly average in the financial
year concerned.
3. The revised instructions shall be applicable with immediate
effect.
Yours faithfully,
(A.K Khound)
Chief General Manager