i)
Purpose: To achieve the priority sector lending
target in the event of shortfall and incentivize the surplus banks.
ii)
Nature of the Instruments: There will be
no transfer of risks or loan assets.
iii)
Modalities: The PSLCs will be traded through the
CBS portal (e-Kuber) of RBI.
iv)
Sellers/Buyers: Scheduled Commercial Banks
(SCBs), Regional Rural Banks (RRBs), Local Area Banks (LABs), Small
Finance Banks (when they become operational) and Urban Co-operative Banks.
v) Types of PSLCs: There would be
four kinds of PSLCs :–
i)
PSLC
Agriculture: Towards the total agriculture lending target.
ii) PSLC SF/MF: Towards
lending to Small and Marginal Farmers.
iii)
PSLC
Micro Enterprises: Towards lending to Micro Enterprises.
iv) PSLC General: Towards
the overall priority sector target.
The
above four types of certificates will represent specific loans and count for
specific sub-targets/targets as hereunder:
Sr. No.
|
Type of PSLCs
|
Representing
|
Counting for
|
1
|
PSLC
- Agriculture
|
All eligible Agriculture
loans except loans to
SF/MF
|
Achievement of agriculture
and overall PSL target
|
2
|
PSLC
- SF/MF
|
All eligible loans to small/
marginal farmers
|
Acheivement of SF/MF, agriculture
and overall PSL target
|
3
|
PSLC
– Micro Enterprises
|
All PSL
Loans to Micro Enterprises
|
Achievement of micro- enterprise
and overall PSL target
|
4
|
PSLC-General
|
The residual priority sector
loans
|
Achievement of overall PSL
target
|
A
bank having shortfall in any sub-target will have to buy the specific PSLC. In
case of shortfall in the overall target ,the bank may buy any of the available
PSLCs.
vi)
Computation of PSL achievement: Sum of outstanding priority sector
loans, and the net nominal value of the PSLCs. Such computation will be done
separately where sub targets are prescribed as on the reporting date.
vii)
Amount eligible for issue: Normally PSLCs
will be issued against the underlying assets. However, a bank is
permitted to issue PSLCs upto 50 percent of previous year’s PSL achievement
without having the underlying in its books.
viii)
Credit Risk: There will be no transfer of credit
risk on the underlying as there is no transfer of tangible assets or
cash flow.
ix)
Expiry date: All PSLCs will expire by March 31st,
irrespective of the date it was first sold.
x)
Settlement: The settlement of funds will be done
through the e-Kuber portal.
xi)
Value and Fee: The nominal value of PSLC would
represent the equivalent of the PSL. The fee to the seller will be
market determined.
xii)
Lot Size: A standard lot size of Rs.25
lakh and its multiples.
xiii)
Accounting: The fee paid would be treated as an ‘Expense’
and the fee received would be treated as ‘Miscellaneous Income’.
xiv)
Disclosures: Both seller and buyer shall report the
amount of PSLCs sold and purchased during the year in the ‘Disclosures
to the Balance Sheet’.
Based on RBI notification dated 7/4/17. For any further
clarification, please refer www.rbi.org.in.................
Poppy Sharma
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