The Reserve Bank of India (RBI) has hiked the prudential inter-bank exposure limit for the urban cooperative banks (UCBs) to 20%, from the current cap of 10%, of their total deposit liabilities.
Earlier, prudential inter-bank exposure limit, which is the total amount of deposits placed by an UCB with other banks including includes instruments such as call money/notice money, and deposits placed for availing clearing facility, CSGL facility, bank guarantee (BG) and letter of credit (LC), was capped at 10% of its total deposit liabilities as on March 31, 2008.