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RBI/2005-06/396
UBD.PCB.Cir.No.55/09.11.600/05-06
June 1, 2006.
The Chief Executive Officers of all
Primary (Urban) co-operative Banks
Dear Sir/Madam,
Annual Policy Statement for the Year 2006-07-
Risk Weight on Exposures to Commercial Real Estate
Please refer to our Circular No. UBD.PCB.Cir.No.
8/09.116.00/05-06 dated August 9, 2005 wherein, the risk weight on banks’
exposure to the commercial real estate was increased from 100 per cent to 125
per cent and was applicable on an on-going basis. In this connection, a reference
may be made to paragraph 186 of the Annual Policy Statement for the Year 2006-07
(extract enclosed). As mentioned therein, it has been decided
to increase the risk weight on banks’ exposure to the commercial real estate
to 150 per cent.
2. Please acknowledge receipt to the Regional
Office concerned.
Yours faithfully,
sd/-
(A.K Khound)
Chief General Manager
Extract of Annual Policy Statement for the year
2006-07
Risk Weight on Exposures to Commercial Real
Estate
186. In July 2005, the
Reserve Bank had increased the risk weight on exposures to commercial real estate
from 100 per cent to 125 per cent. Given the continued rapid expansion in credit
to this sensitive sector, it is proposed:
• to increase the risk weight to 150
per cent.
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