Enhanced Bulk Deposit Limit for Urban Co-op Banks in T3 and T4

The Reserve Bank of India (RBI) has reviewed and revised the instructions regarding bulk deposits for Urban Co-operative Banks (UCBs).

The Master Direction – Reserve Bank of India (Co-operative Banks – Interest Rate on Deposits) Directions, 2016 dated May 12, 2016, provided the definition of “Bulk Deposit” as single Rupee term deposits of Rupees fifteen lakh and above.

Following a recent review, this definition has undergone a significant change. Thus, the revised definition of “Bulk Deposit” for Primary (Urban) Co-operative Banks is as follows:

  • Enhanced Limits for Scheduled UCBs (Tier 3 and 4): There has been a significant change in the bulk deposit limit for Scheduled Primary (Urban) Co-operative Banks classified as Tier 3 and 4 under the revised regulatory framework. The new limit has been increased to Rupees one crore and above, indicating a significant upward adjustment.
  • Updated Definitions for other UCBs: For all other Co-operative banks (excluding Scheduled UCBs in Tier 3 and 4), the bulk deposit limit remains at Rupees fifteen lakh and above. This distinction is designed to accommodate the wide range of sizes and operational contexts of UCBs, ensuring a regulatory approach that is tailored to their needs.

The circular shall apply to all Scheduled (Primary) Urban Co-operative Banks.

The revised definitions reflect the changing requirements of the banking industry and seek to find a middle ground between regulatory oversight and operational adaptability.