Loans and advances to directors and their relatives of UCBs

RBI vide notification no. RBI/2020-21/89
dated 05th February, 2021 has notified that UCBs shall not make, provide or renew any loans and advances or extend any other financial accommodation to or on behalf of their directors or their relatives, or to the firms / companies / concerns in which the directors or their relatives are interested.
However, The following categories of director-related loans shall, however, be excluded from “loans and advances” for the purpose of these directions:
i) Regular employee-related loans to staff directors, if any, on the Boards of UCBs;
ii) Normal loans, as applicable to members, to the directors on the Boards of Salary Earners’ UCBs;
iii) Normal employee-related loans to Managing Directors / Chief Executive Officers of UCBs;
iv) Loans to directors or their relatives against Government Securities, Fixed Deposits and Life Insurance Policies standing in their own name.

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