The UCBs, as per the draft, will probably be permitted to elevate Tier-I and Tier-II capital by issuing Perpetual Non-Cumulative Preference Shares (PNCPS), Perpetual Cumulative Preference Shares (PCPS), Redeemable Non-Cumulative Preference Shares (RNCPS) and Redeemable Cumulative Preference Shares (RCPS).
The UCBs may also be allowed to challenge Perpetual Debt Instruments (PDI) which will probably be eligible to be included in Tier-I capital and Long Term Subordinated Bonds(LTSB) as Tier-II capital.
The Banking Regulation (Amendment) Act, 2020 got here into power with impact from June 29, 2020 for Primary (Urban) Co-operative Banks (UCBs).
In view of the adjustments mandated by the amendments, the Reserve Bank of India has launched the draft circular on ‘Issue and regulation of share capital and securities – Primary (Urban) Co-operative Banks’.
It has invited feedback on the draft from UCBs, sector individuals and different events by August 31, 2021.