<p>The Reserve Bank of India on Friday revised exposure limits for urban cooperative banks (UCBs) to a single borrower and a group of borrowers to 15 per cent and 25 per cent, respectively, of tier-1 capital.</p>.<p>The RBI had earlier permitted UCBs to have exposures up to 15 per cent and 40 per cent of their capital funds to a single borrower and a group of borrowers, respectively.</p>.<p>"On a review, it has been decided that the prudential exposure limits for UCBs for a single borrower and a group of connected borrowers shall be 15 per cent and 25 per cent, respectively, of their tier-I capital," the RBI said in a notification.</p>.<p>The revised exposure limits shall be applicable to all types of fresh exposures taken by UCBs.</p>.<p>UCBs shall bring down their existing exposures which are in excess of the revised limits to within the revised limits by March 31, 2023, the RBI said.</p>.<p>The RBI said tier-1 capital as on March 31 of the preceding financial year shall be reckoned for the purpose of fixing the exposure limits.</p>.<p>"Tier-1 capital for the purpose will be the same as that prescribed for computation of capital adequacy of UCBs," it said.</p>.<p>UCBs shall have at least 50 per cent of their aggregate loans and advances comprising loans of not more than Rs 25 lakh or 0.2 per cent of their tier 1 capital, whichever is higher, subject to a maximum of Rs 1 crore, per borrower.</p>.<p>The RBI also increased the overall priority sector lending (PSL) target for UCBs to 75 per cent of adjusted net bank credit (ANBC) or credit equivalent amount of off-balance sheet exposure (CEOBSE), whichever is higher from 40 per cent earlier.</p>.<p>The RBI also asked UCBs to prepare a board approved action plan for compliance with the revised exposure limits and priority sector lending targets.</p>
<p>The Reserve Bank of India on Friday revised exposure limits for urban cooperative banks (UCBs) to a single borrower and a group of borrowers to 15 per cent and 25 per cent, respectively, of tier-1 capital.</p>.<p>The RBI had earlier permitted UCBs to have exposures up to 15 per cent and 40 per cent of their capital funds to a single borrower and a group of borrowers, respectively.</p>.<p>"On a review, it has been decided that the prudential exposure limits for UCBs for a single borrower and a group of connected borrowers shall be 15 per cent and 25 per cent, respectively, of their tier-I capital," the RBI said in a notification.</p>.<p>The revised exposure limits shall be applicable to all types of fresh exposures taken by UCBs.</p>.<p>UCBs shall bring down their existing exposures which are in excess of the revised limits to within the revised limits by March 31, 2023, the RBI said.</p>.<p>The RBI said tier-1 capital as on March 31 of the preceding financial year shall be reckoned for the purpose of fixing the exposure limits.</p>.<p>"Tier-1 capital for the purpose will be the same as that prescribed for computation of capital adequacy of UCBs," it said.</p>.<p>UCBs shall have at least 50 per cent of their aggregate loans and advances comprising loans of not more than Rs 25 lakh or 0.2 per cent of their tier 1 capital, whichever is higher, subject to a maximum of Rs 1 crore, per borrower.</p>.<p>The RBI also increased the overall priority sector lending (PSL) target for UCBs to 75 per cent of adjusted net bank credit (ANBC) or credit equivalent amount of off-balance sheet exposure (CEOBSE), whichever is higher from 40 per cent earlier.</p>.<p>The RBI also asked UCBs to prepare a board approved action plan for compliance with the revised exposure limits and priority sector lending targets.</p>