Investment terms for UCBs relaxed further

MUMBAI: The Reserve Bank of India (RBI) has permitted Urban Cooperative Banks (UCBs) to undertake eligible transactions for acquisition/sale of non-SLR investment in secondary market with mutual funds, pension/provident funds and insurance companies. UCBs were hitherto allowed to undertake transactions only with commercial banks and primary dealers, subject to certain conditions. The RBI said the new move was towards harmonization of regulations for Urban and Rural Co-operative Banks. UCBs are allowed to invest in ‘A’ or equivalent and higher rated commercial papers (CPs) and bonds; and units of debt mutual funds and money market mutual funds.