| Sr.No. | Issue raised | Response |
|---|
| 1. | The year should be calendar year or financial year? | Since banks close their accounts at the end of March, it may be more convenient to follow the financial year. However, the banks may follow calendar year or any other period of 12 months provided, it is consistently followed in future. |
| 2. | Whether to arrive at the total transactions of the year, transactions entered into directly with counter-parties, i.e. where no brokers are involved would also be taken into account? | Not necessary. However, if there are any direct deals with the brokers as purchasers or sellers the same would have to be included in the total transactions to arrive at the limit of transactions to be done through an individual broker. |
| 3. | Whether in case of ready forward deals both the legs of the deals i.e. purchase as well as sale will be included to arrive at the volume of total transactions? | Yes |
| 4. | Whether central loan/state loan/treasury bills etc. purchased though direct subscriptions/auctions will be included in the volume of total transactions? | No, as brokers are not involved as intermediaries. |
| 5. | It is possible that even though bank considers that a particular broker has touched the prescribed limit of 5%, he may come with an offer during the remaining period of the year which the bank may find to its advantage as compared to offers received from the other brokers who have not yet done business upto the prescribed limit. | If the offer received is more advantageous the limit for the broker may be exceeded and the reasons therefore recorded and approval of the competent authority/Board obtained post facto. |
| 6. | Whether the transactions conducted on behalf of the clients would also be included in the total transactions of the year? | Yes, if they are conducted through the brokers. |
| 7. | For a bank which rarely deals through brokers and consequently the volume of business is small maintaining the brokewise limit of 5% may mean splitting the orders in small values amongst different brokers and there may also arise price differential. | There may be no need to split an order. If any deal causes, the particular broker's share to exceed 5% limit, our circular provides the necessary flexibility inasmuch as Board's postfacto approval can be obtained. |
| 8. | During the course of the year, it may not be possible to reasonably predict what will be the total quantum of transactions through brokers as a result of which there could be deviation in complying with the norm of 5%. | The bank may get postfacto approval from the Board after explaining to it, the circumstances in which the limit was exceeded. |
| 9. | Some of the small private sector banks have mentioned that where the volume of business particularly, the transactions done through brokers is small the observance of 5% limit may be difficult. A suggestion has, therefore, been made that the limit may be required to be observed if the business done through a broker, exceeds a cut-off point of say Rs.10 crores. | As already observed the limit of 5% can be exceeded subject to reporting the transactions to the competent authority post facto. Hence, no change in instructions are considered necessary. |
| 10. | Whether the limit is to be observed with reference to total transactions of the previous year as the total transactions of the current year would be known only at the end of the year? | The limit has to be observed with reference to the year under review. While operating the limit, the bank should be in view the expected turnover of the current year which may be based on turnover of the previous year and anticipated rise or fall in the volume of business in the current year. |
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1. With a view to imparting clarity and to ensure that there is no divergence in the implementation of the guidelines, some of the terms used in the guidelines are defined below.
2. A security will be treated as rated if it is subjected to a detailed rating exercise by an external rating agency in India which is registered with SEBI and is carrying a current or valid rating. The rating relied upon will be deemed to be current or valid if:
3. The investment grade ratings awarded by each of the external rating agencies operating in India would be identified by the IBA/ FIMMDA. These would also be reviewed by IBA/ FIMMDA at least once a year.
4. A ‘listed’ debt security is a security which is listed in a stock exchange. If not so, it is an ‘unlisted’ debt security.
5. A non performing investment (NPI), similar to a non performing advance (NPA), is one where
a. Interest/ instalment (including maturity proceeds) is due and remains unpaid for more than 180 days. The delinquency period has become 90 days with effect from 31st March 2004.
b. if any credit facility availed by the issuer is NPA in the books of the bank, investment in any of the securities issued by the same issuer would also be treated as NPI.
1. IFCI Ltd.
2. Industrial Investment Bank of India Ltd.
3. Tourism Finance Corporation of India Ltd.
4. Risk Capital and Technology Finance Corporation Ltd.
5. Technology Development and Information Company of India Ltd.
6. Power Finance Corporation Ltd.
7. National Housing Bank.
8. Small Industries Development Bank of India
9. Rural Electrification Corporation Ltd.
10. Indian Railways Finance Corporation Ltd.
11. National Bank for Agriculture and Rural Development.
12. EXIM Bank of India.
13. Infrastructure Development Finance Co. Ltd.
(Rs. in crore)
NOTE: 1.* Total under column 3 should tally with the total of investments in Schedule 8 to the balance sheet:
2. Amounts reported under columns 4, 5, and 6 above may not be mutually exclusive.
A. List of Circulars consolidated in the Master Circular
| No. | Circular No. | Date | Subject |
|---|
| 1. | UBD.BPD.SUB.CIR.5/09.80.00/2003-04 | 28-04- 2004 | Transactions in Government Securities (DVP III) |
| 2. | UBD.BPD.PCB.Cir.45/16.20.00/2003-04 | 15-04- 2004 | Investment in non-SLR debt securities by UCBs |
| 3. | UBD.BPD.PCB.Cir.44/09.29.00/2003-04 | 12-04- 2004 | Sale of Govt. Securities allocated during the auctions for primary issues on the same day. |
| 4. | UBD.BPD.PCB.Cir.42/09.11.00/2003-04 | 1-04- 2004 | Maintenance of CSGL Accounts |
| 5. | UBD.BPD.PCB.Cir.35/13.05.00/2003-04 | 27-02-2004 | Placement of deposits by NSCBs with strong sch UCBs |
| 6. | UBD.BPD.PCB.Cir.34/13.05.00/2003-04 | 11-02-2004 | Maximum limit on advances-limits on exposure to individual/group borrowers-Computation of capital funds |
| 7. | UBD.BPD.PCB.Cir.33/09.11.00/2003-04 | 11-02-2004 | Maintenance of CSGL Accounts |
| 8. | UBD.BPD.PCB.FIR.26/16.20.00/2003-04 | 2-12-2004 | Investment in shares of ICICI Bank Ltd. |
| 9. | UBD.BPD.PCB.Cir.12/09.29.00/2003-04 | 04-09-2003 | Investment Portfolio of UCBs-Guidelines for Investment Fluctuation Reserve |
| 10. | UBD.BPD.Cir.No.11/09.29.00/2003-04 | 02-09-2003 | Investment Portfolio of UCBs-Classification & Valuation of investments |
| 11. | UBD.BPD.PCB.Cir.8/9.2900/2003-04 | 16-08-2003 | Trading of Government Securities in Stock Exchanges |
| 12. | UBD.BPD.Cir.No.1/09.11.00/2003-04 | 08-07-2003 | Settlement in respect of Government Securities Transaction-Compulsory settlement through CCIL |
| 13 | UBD.BPD.PCB.Cir.No.2/09.80.00/2003-04 | 08-07-2003 | Scheme for Non-Competitive Bidding Facility in the Auction of Government of India dated securities |
| 14. | UBD.PCB.56/09.29.00/2003-04 | 02-07-2003 | Investment Portfolio of Banks-Transactions in Securities |
| 15. | UBD.BPD.PCB.Cir.No.46/16.20.00/2002-03 | 17-05-2003 | Placement of deposits by non-scheduled UCBs with Scheduled UCBs |
| 16. | UBD.BPD.PCB.No.44/09.80.00/2002-03 | 12-05-2003 | Guidelines for uniform accounting for Repo/Reverse Repo transactions |
| 17. | UBD.BPD.PCB.Cir.No.39/09.29.00/2002-03 | 13.03.2003 | Trading of Government Securities on Stock Exchange |
| 18 | UBD.BP.No.35/16.26.00/2002-03 | 18-02-2003 | Prices of Government Securities in the Secondary Market |
| 19 | UBD.BPD.SPCB.Cir.No.9/09.29.00/2002-03 | 27-01-2003 | Reconciliation Procedure for Government Loans |
| 20 | UBD.POT.PCB.Cir.No.06/09.29.00/2002-03 | 06-08-2002 | Investment Portfolio of UCBs-Transactions in Government Securities |
| 21 | UBD.POT.PCB.Cir.No.5/09.29.00/2002-03 | 22-07-2002 | Investment portfolio of banks-transaction in securities |
| 22 | UBD.POT.No.49/09.80.00/2001-02 | 17-06-2002 | Ready Forward Contracts |
| 23 | UBD.CO.POT.PCB.Cir.No.48/09.29.00/2001-02 | 11-06-2002 | Certification of holding of securities in banks’ investment portfolio |
| 24 | UBD.BR.No.47/16.26.00/2001-02 | 07-06-2002 | Investments in Government and other approved securities by Urban Co-op Banks |
| 25 | UBD.PCB.Cir.No.46/09.29.00/2001-02 | 06-06-2002 | Investment Portfolio of Banks-Transaction in Securities |
| 26 | UBD.Plan.SCB.Cir.No.10/09.29.00/2001-02 | 26-04-2002 | Investment Portfolio of Urban Banks-Transactions in Government Securities |
| 27 | UBD.Plan.PCB.Cir.No.41/09.29. 00/2001-02 | 20-04-2002 | Investment Portfolio of Banks-Transactions in Securities |
| 28 | UBD.BR.Cir.No.19/16.26.00/2001-02 | 22-10-2001 | B,R.Act, 1949 (AACS) Section 24-Investment in Government and other approved securities |
| 29 | UBD.No.BR.6/16.26.00/2000-01 | 09-08-2001 | B.R. Act, 1949 (AACS) Section 24-Investment in Government and other approved securities |
| 30 | UBD.No.CO.BSD.I.PCB.44/12.05.05/2000-2001 | 23-04-2001 | Guidelines for Classification and Valuation of Investments by Banks |
| 31 | UBD.No.BR.Cir/42/16.26.00/2000-01 | 19-04-2001 | Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) - Section 24 - Investment in Government and other approved Securities by Urban Co-operative Banks (UCBS) |
| 32 | UBD.No.43/16.20.00/2000-01 | 19-04-2001 | Investment of Funds by Urban Co-operative Banks as deposits with other institutions and other Urban Co-operative Banks |
| 33 | UBD.No.POT.Cir.PCB.39/09.29.00/ 2000 | 18-04-2001 | Sale of Government Securities Allotted in the Auctions of Primary Issues |
| 34 | UBD.No.Plan.PCB.Cir/22/09.29.00/ 2000-2001 | 30-12-2000 | Investment Portfolio of banks - Transactions in securities - Role of brokers |
| 35 | UBD.Plan.PCB.Cir/26/09.80.00/99-2000 | 28-03-2000 | Ready Forward Contracts |
| 36 | UBD.Plan.18/09.80.00/1999-2000 | 30-12-1999 | Banks' own investment in State Government Loans -Payment of brokerage commission |
| 37 | UBD.No.Plan.PCB.04/09.80.00/99-2000 | 25-08-1999 | Ready Forward Transactions |
| 38 | Ref. UBD No.BR. 26/18.20.00/98-99 | 07-04-1999 | Investment of funds by primary (urban) co-operative banks In public sector undertakings/ companies |
| 39 | UBD.No.Plan.PCB.DIR.3/09.80.00/98-99 | 17-08-1998 | Reverse Ready forward transactions |
| 40 | UBD.No.BR.1/16.20.00/98-99 | 10-07-1998 | Investment by urban co-op. banks-Valuation of Investments-US-64 units |
| 41 | UBD No.61/16.20.00/97-98 | 04-06-1998 | Investment of Investment by Urban Cooperative Banks - Valuation of Investment - US- 64 Units funds by primary (urban) co-operative banks in public sector undertakings/companies |
| 42 | UBD.No.Pl.an.PCB/Cir.56/09.60.00/ 97-98 | 13-05-1998 | Investment in Certificates of Deposit (CDs) by primary (urban) co-operative banks |
| 43 | UBD.No.Plan.SUB.20/09.81.00/97-98 | 19-02-1998 | Retailing of Government Securities |
| 44 | UBD.No.BP.37/16.20.00/97-98 | 29-01-1998 | Investment by Urban Co-operative Banks - Valuation of Investments |
| 45 | UBD.No.BSD.I (PCB) 22/ 12. 05. 00 / 97-98 | 26-11-1997 | Investment by Urban Co-operative Banks Valuation of Investments |
| 46 | UBD.No.Plan.SUB.No.17/09.83.00/97-98 | 19-11-1997 | Statistical data relating to investments in Money Market Instruments/Government Securities |
| 47 | UBD.No.Plan.PCB/Cir.21/09.60.00/97-98 | 11-11-1997 | Investment in certificates of deposit (CDs) by Urban Co-operative Banks |
| 48 | UBD.No.Plan.PCB.Cir.19/09.29.00/97-98 | 10-11-1997 | Investment Portfolio of banks-Transactions in securities-Role of brokers |
| 49 | UBD.No.Plan.PCB.56/09.60.00/96-97 | 06-06-1997 | Investment in Certificates of Deposit (CDs) by Urban Co-operative Banks |
| 50 | UBD.No.DS.SUB.CIR.7/13.07.00/96-97 | 07-01-1997 | Investment of Surplus Funds by primary co-operative Banks in Bills Rediscounting Scheme |
| 51 | UBD.No.Plan.PCB.34/09.29.07/96-97 | 30-12-1996 | Investment portfolio of banks Transactions in securities |
| 52 | UBD.No.Plan.PCB.No.30/09.82.00/96-97 | 27-11-1996 | Investment by Urban Co-operative Banks in the Units of Unit Trust of India (UTI) |
| 53 | UBD.No.Plan.PCB.19/09.29.00/96-97 | 11-09-1996 | Investment portfolio of banks - System for custody and control of unused B. R. Forms |
| 54 | UBD.No.Plan.PCB.7/09.60.00/96-97 | 19-07-1996 | Investment in certificates of deposit by Urban Co-operative Banks |
| 55 | UBD.No.Plan/PCB/69/09.29.00/95-96 | 21-06-1996 | Investment portfolio of banks - Transactions in securities |
| 56 | UBD.No.BR.Cir.52/16.20.00/95-96 | 16-03-1996 | Investment of funds by Urban Co-operative Banks in Public Sector Undertakings/Companies |
| 57 | UBD.No.Plan.PCB.47/09.60.00/95-96 | 29-02-1996 | Investment in Certificates of Deposit (CDs) by Urban Co-operative Banks |
| 58 | UBD.No.BR.12/16.20.00/95-96 | 06-01-1996 | Investment of funds by urban co-operative banks in bonds of public sector undertakings |
| 59 | UBD.No.BR.Cir.33/16.26.00/95-96 | 03-01-1996 | Banking Regulation Act, 1949 (As applicable to Co-operative Societies) Section 24-Investment in Government and other approved securities by primary co-operative banks |
| 60 | UBD.No.Cir.63/16.26.00/94-95 | 16-06-1995 | Banking Regulation Act, 1949 (As applicable to Co-operative Societies) Section 24-Investment in Government and other approved securities by primary co-operative banks |
| 61 | UBD.No.BR.CIR.53/16.20.00/94-95 | 24-04-1995 | Investment of funds by Urban Co-operative Banks in Public Sector Undertakings/Companies |
| 62 | UBDNo.Plan.PCB.32/09.29.00/94-95 | 24-11-1994 | Investment Portfolio of Banks - Transactions in Securities - Bank Receipts/Role of brokers |
| 63 | UBD.No.Plan.PCB.29/09.80.00/94/95 | 09-11-1994 | Ready Forward Transactions |
| 64 | UBD.No.Plan.PCB.14/09.80.00/94-95 | 24-08-1994 | Ready Forward Transactions |
| 65 | UBD.BR.10/PCB(CIR)/16.20.00/9495 | 01-08-1994 | Investment of funds by primary co-operative banks in public sector undertakings/companies |
| 66 | UBD.BR.CIR.72/16.20.00/93-94 | 16-05-1994 | Investment of funds by urban co-operative banks in public sector undertakings/companies |
| 67 | UBD.No.PLAN (PCB).CIR.56/09.29.00/93-94 | 11-02-1994 | Investment portfolio of banks - Transactions in Securities. |
| 68 | UBD.No.Plan.51/09.29.00/93-94 | 20-01-1994 | Investment portfolio of banks - Transactions in Securities - Bouncing of SGL transfer forms - Penalties to be imposed: |
| 69 | UBD.No.3/09.29.00/93-94 | 02-08-1993 | Investment port-folio of banks - Transactions in securities - Aggregate contract limit for individuals brokers-Clarifications |
| 70 | UBD.No.Plan.74/UB.81-92/93 | 17-05-1993 | Investment portfolio or banks - Transactions in securities |
| 71 | UBD.No.Plan.13/UB.81/92-93 | 15-09-1992 | Investments portfolio of banks Transactions in securities |
| 72 | UBD.No.BR.1866/A.12(19)-87/88 | 13-06-1988 | Investments of Funds by Urban Co-operative Banks as Deposits with Public Sector Undertakings/ Companies/Corporations/Co-operative Institutions |
| 73 | UBD.No.DC.84 /R.1(B).87/88 | 13-02-1988 | Bills Rediscounting Scheme - Rediscounting of Bills with Banks and Financial Institutions |
| 74 | UBD.No.BR.1455/A12(24)-85/86 | 31-05-1986 | Banking Regulation Act, 1949 (as applicable to co-operative societies) - Section 24 - Investment in Units issued by the Unit Trust of India |
| 75 | UBD.BR.871/A.12 (24)-84/85 | 10-05-1985 | Banking Regulation Act, 1949 (as applicable to co-operative societies) - Section 24 - Investment made under national deposit scheme |
| 76 | UBD.BR.498/A.12 (24) -84/85 | 08-01-1985 | Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) Section 24 - Investment in Government and Other Trustee Securities by primary co-operative banks |
| 77 | UBD.NO.DC.597/R.41-84/85 | 31-10-1984 | 7% Capital Investment Bonds |
| 78 | UBD.P&O.1121/UB. -63-83/84 | 01-06-1984 | Bank's own investment in central state government loans-payment of brokerage |
| 79 | ACD.ID (DC) 1799/R.36/79/80 | 10-01-1980 | Subscription/purchase of 7 year national rural development bonds |
| 80 | ACD.ID. (DC) 1800/R.36-79/80 | 10-01-1980 | Directive relating to subscription/purchase of 7 year national rural development bonds |
| 81 | ACD.BR.446/A.12 (19)/72-3 | 01-11-1972 | Banking Regulation Act, 1949 (As Applicable to Co-operative Societies) Section 19 |
| 82 | ACD.BR.463/A.12 (19)/70-7 | 09-11-1970 | Banking Regulation Act, 1949 (As Applicable to Co-operative Societies): Section 19 |
| 83 | ACD.BR.1/A.12 (19)/68-9 | 01-07-1968 | Section 19 of the Banking Regulation act 1949 (as applicable to co-operative societies): Restriction on holding shares in other co-operative societies |
| 84 | ACD.BR.3/A.12 (19)/68-9 | 01-07-1968 | Section 19 of the Banking Regulation Act, 1949 (as applicable to co-operative societies): Restriction on holding shares in other co-operative societies |
| 85 | ACD.BR.903/A.12 (19)/67-8 | 22-12-1967 | Banking Regulation Act, 1949 (as applicable to Co-operative Societies): Section 19: Restriction on holding of shares in other co-operative societies |
| 86 | ACD.BR.388/A.11 (19) 65-6 | 01-03-1966 | Section 19 of the Banking Regulation Act: Restriction on holding shares in other co-operative societies |
B. List of Other Circulars from which instructions relating to Investments have also been consolidated in the Master Circular