RBI Bulletin

OCTOBER 2006

RBI/2006-07/146 Ref. No. MPD.BC. 285/07.01.279/ 2006-07 dated October 11, 2006.

All Scheduled Commercial Banks

At present, the ceiling on interest rates on pre-shipment rupee export credit up to 180 days and post-shipment rupee export credit up to 90 days is stipulated at BPLR minus 2.5 per cent. This dispensation is valid up to October 31, 2006.

2. It has been decided to extend the validity of the above dispensation up to April 30, 2007 (Annex).

RBI/2006/155 UBD.PCB.Cir.No.17/ 09.09.001 /2006-07 dated October 17, 2006.

The Chief Executive Officers of All Primary (Urban) Cooperative Banks

Please refer to our Circular UBD.CO.BPD. No. 52/ 09.09.001/ 2002-03 dated June 13, 2003. In this connection, Government of India have recently finalised a new 'Prime Minister's 15- Point Programme for the

Welfare of Minorities'. An important objective of the aforesaid Programme is to ensure that an appropriate percentage of the priority sector lending is targeted for the minority communities and that the benefits of various Government sponsored schemes reach the underprivileged, which includes the disadvantaged sections of the minority communities. You may, therefore, issue necessary instructions to your branches advising them to ensure that within the overall target for priority sector lending and the sub- target of 25 per cent for the weaker sections, sufficient care is taken to ensure that the minority communities also receive an equitable portion of the credit.

RBI/2006/154 UBD.(PCB).Cir.No.16/09.09.001/06-07 dated October 17, 2006.

The Chief Executive Officers All Primary (Urban) Co-operative Banks

Please refer to circular UBD.BPD (PCB).Cir.No.29/ 09.09.01/04-05 dated December 14, 2004 on the above subject, wherein, the banks were permitted to grant housing loans up to a maximum of Rs. 15.00 lakh per beneficiary of a dwelling unit as against the earlier limit of Rs. 10.00 lakh.

2. It has been decided to allow UCBs to extend individual housing loan upto the limit of Rs. 25.00 lakh per beneficiary of a dwelling unit. However, housing finance to borrowers availing loans above Rs. 15.00 lakh will not be treated as priority sector lending.

3. Subject to prudential exposure ceiling, bank's may, with the approval of their Boards, extend direct housing finance, repayable within a maximum period of 15 years as hitherto. The present stipulation that the amount of installment and interest should not exceed 30 per cent of the income of the borrowers stands dispensed with.

4. All other instructions issued in this regard remain unchanged.

RBI/2006-07/164 REF.No.MPD.BC. 287/07.01.279/ 2006-07 dated October 31, 2006.

All Scheduled Banks [excluding Regional Rural Banks (RRBs)] and Primary Dealers

Please refer to FMD Circular FMD.MO.AG.No.10/ 01.01.01/2006-07 dated October 31, 2006 on Liquidity Adjustment Facility - Repo and Reverse Repo Rates.

2. The fixed repo rate under LAF has been revised to 7.25 per cent with immediate effect. Accordingly, the Standing Liquidity Facilities provided to Banks (export credit eligible for refinance) and Primary Dealers (PDs) (collateralised liquidity support) from the Reserve Bank would be available at repo rate i.e. 7.25 per cent with immediate effect.

RBI/2006-07/153 UBD.CO. (PCB). Cir No.15 /09.39.000/ 2006-07 dated October 16, 2006.

The Chief Executive Officers of All Primary (urban) Co-operative Banks

CUSTOMER SERVICE - NON-ISSUANCE OF PASSBOOKS TO SAVINGS BANK ACCOUNT-HOLDERS (I NDIVIDUALS) – UCBS

As you are aware, a passbook is a ready reckoner of transactions and being handy and compact, is far

more convenient to the small customer than a statement of account which has some inherent difficulties, viz., need of filing, tallying of opening balance with closing balance of last statement, loss/delay in receipt of statement, etc.

2. Banks are, therefore, advised to invariably offer passbook facility to all their savings bank account-holders (individuals). The cost of providing such passbooks should not be recovered from the customers.

RBI/2006-07/143 UBD.CO. BPD.Cir No. 12 /09.39.000/ 2006-07 dated October 6, 2006.

The Chief Executive Officers of All Primary (urban) Co-operative Banks

In order to improve the quality of service available to customers in branches, it would be useful if the address/telephone number of the branch is mentioned on the Pass Books/Statement of Accounts.

2. Banks are therefore advised to ensure that full address/telephone number of the branch is invariably mentioned in the Pass Books/Statement of Accounts issued to account holders.