Question

Under the revised bulk deposit guidelines for UCBs,

Q: Answer-Under the revised bulk deposit guidelines for UCBs, Tier 3 and Tier 4 UCBs are allowed to raise bulk...

The Review of Instructions on Bulk Deposits for Urban Co-operative Banks requires UCBs to maintain a CRAR of at least 9 and obtain board approval if they wish to offer interest rates on bulk deposits exceeding the average rate.

Tier 3 and Tier 4 UCBs are allowed to raise bulk deposits only above a specific threshold. What conditions must be met by UCBs for offering interest rates on bulk deposits that exceed the average interest rate on term deposits?

A The interest rate must be pre-approved by the RBI for all bulk deposits above ₹1 crore.

B UCBs can offer interest rates up to 2% higher than the average rate for retail deposits, subject to board approval.

C UCBs must maintain a minimum CRAR of 9% and obtain the board’s approval for interest rates exceeding the average.

D UCBs must consult with their Lead Bank before setting higher rates for bulk deposits.

E UCBs are required to report all bulk deposit rates exceeding the standard to the RBI within 30 days.

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Under the revised bulk deposit guidelines for UCBs,

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