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RBI/2006-07/61
UBD.PCB.BPD. 1/09.09.001/2006-07
July 11, 2006
The Chief Executive Officers of
All Primary (Urban) Co-operative Banks
Dear Sir / Madam,
Priority Sector Lending – Investment in special
bonds issued by NHB/ HUDCO
Please refer to our circular No.UBD.Plan.PCB.17/09.09.010/1999-2000
dated December 22, 1999 in terms of which investments made by UCBs in bonds
issued by NHB / HUDCO exclusively for financing of housing, irrespective of
the loan size, per dwelling unit, are reckoned for inclusion under Priority
Sector advances.
2. With a view to rationalising the banks’
investments under priority sector lending and encouraging banks to increasingly
lend directly to priority sector borrowers, it has been decided that investments
that may be made by banks on or after April 1, 2007 in the bonds issued by NHB
/ HUDCO shall not be eligible for classification under priority sector lending.
3. The other terms and conditions laid down
in the above circular remain unchanged. The banks are therefore, advised to
align their priority sector lending/ investments suitably so as to comply with
the above guidelines.
4. Please acknowledge receipt to the Regional Office concerned.
Yours faithfully,
(N.S.Vishwanathan)
Chief General Manager-in-charge
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