You are here:

Don't donate to trusts where directors hold post: RBI tells UCBs

Aug 30, 2013 15:35 IST

#India   #PolicyWatch   #RBI   #urban co-operative banks  

Mumbai: The Reserve Bank today directed the urban co-operative banks (UCBs) to stop giving donations to trusts and institutions where directors or their relatives hold positions or have interests.

"...UCBs are, with immediate effect, prohibited from giving donations to Trusts and Institutions, where directors, and/or their relatives hold position or are interested, even within the permissible ceiling of 1 percent of the published profits of the bank for the previous year," RBI said in a notification.

Reserve Bank of India logo. Reuters

Reserve Bank of India logo. Reuters

RBI said it was brought to its notice that some of the UCBs made contributions which were in nature of donations to the trusts or charitable in which the directors or relatives were interested in.

As per earlier directive, UCBs were allowed for normal donations that could be made during a year with restriction of a ceiling of 1 percent of the profits of the bank in the previous year.

PTI