RBi Circular - Deposits placed with NABARD/SIDBI/NHB for meeting shortfall in Priority Sector Lending by Banks-Reporting in Balance Sheet

RBI/2015-16/127
DBR.BP.BC.No.31/21.04.018/2015-16

July 16, 2015

All Commercial Banks
(Excluding Regional Rural Banks)

Dear Sir,

Deposits placed with NABARD/SIDBI/NHB for meeting shortfall in Priority Sector Lending by Banks-Reporting in Balance Sheet

Please refer to para 2.1 (v) of our circular DBR.No.BP.BC.6/21.04.141/2015-16 dated July 1, 2015 - Master Circular: Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks in terms of which banks are permitted to hold among others, RIDF/SIDBI/RHDF deposits under Held to Maturity (HTM) category. Attention is also invited to our mailbox clarification dated June 9, 2005 in terms of which deposits placed with SIDBI/NABARD in lieu of shortfall in lending to priority sector should be shown under Schedule 8 “Investments” of the balance sheet at ItemI(vi)-Others.

2. It has now been decided that for accounting periods commencing on or after April 1, 2015, deposits placed with NABARD/SIDBI/NHB on account of shortfall in priority sector targets should be included under Schedule 11- ‘Other Assets’ under the subhead ‘Others’ of the Balance Sheet. Banks may also disclose the details of such deposits, both for the current year and previous year, as a footnote in Schedule 11 of the Balance Sheet. Further, while presenting the balance sheet for the year ending March 31, 2016, the previous year amounts may be appropriately regrouped.

3. It may be noted that the extant instructions on the treatment of such amounts for the purposes of computation of Capital to Risk Weighted Assets Ratio (CRAR), Adjusted Net Bank Credit (ANBC), etc. remain unchanged.

Yours faithfully,

(Sudarshan Sen)
Chief General Manager-in-Charge