Master Circular to Urban Co-operative Banks on Management of Advances

The RBI vide circular dated April 8, 2022 has issued Master Circular to Urban Co-operative Banks on Management of Advances. The circular provides following Working Capital Requirements:

1. The assessment of working capital requirement of borrowers, other than Micro and Small enterprises,
   requiring fund based working capital limits up to ₹ 1.00 crore and Micro and Small enterprises requiring
   fund based working capital limits up to ₹ 5.00 crore from the banking system may be made on the basis
   of their projected annual turnover.
2. In accordance with these guidelines, the working capital requirement is to be assessed at 25% of the
   projected turnover to be shared between the borrower and the bank, viz. borrower contributing 5% of the
   turnover as net working capital (NWC) and bank providing finance at a minimum of 20% of the turnover.
   Projected turnover may be interpreted as ‘Gross Sales’ including excise duty.

CICs are directed to formulate appropriate policies with the approval of their Boards to share the credit information relating to SHGs or SHG members, on an aggregate basis with the Government agencies, NABARD, banks and MFIs for the purpose of credit planning and research. In accordance with their board approved policies, the CICs could also share the aggregate information with other parties for the purpose of undertaking research that could potentially benefit the SHG segment. The aggregate information shall be shared in a manner that is non-discriminatory and respects the confidentiality of the individual SHG groups and the SHG members as per the relevant laws of the country.