CA IPCC Banking Chapter Applicable Rates May 2017

CA IPCC Banking Chapter Applicable Rates May 2017, CA IPCC Advance Accounting Banking Chapter Applicable rates May 2017. Hi Friends here we are providing complete details for applicable rates for CA IPCC May 2017 Exams like – What is the present Capital Adequacy Ratio, What is the present SLR Ratio for May 2017 Exams, What is the present CRR Ratio, Rates of Provisioning for Non-Performing Assets etc. Now you can scroll down below and check complete details for CA IPCC Banking Chapter Applicable Rates May 2017

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CA IPCC Banking Chapter Applicable Rates May 2017

Please Note – We provide below Rates and Updates from ICAI Advance Accounts RTP for May 2017, & Latest Study Material Issued by ICAI for Advance Accounts, If you have any doubt in below rates then please ask your teacher or Take Reference from ICAI RTP & Study Material….

Maintenance of Statutory Liquidity Ratio (SLR)

In exercise of the powers conferred by sub-section (2A) of Section 24 read with Section 51 and Section 56 of the Banking Regulation Act, 1949 (10 of 1949) and in partial modification of the Notification DBR.No.Ret.BC.63/12.01.001/2015-16 dated December 10, 2015, the Reserve Bank hereby specifies that:

(i) with effect from the dates given below, every scheduled commercial bank, local area bank, primary co-operative bank, state co-operative bank and central cooperative bank shall maintain in India assets (hereinafter referred to as ‘SLR assets’) the value of which shall not, at the close of business on any day, be less than:

  • (a)  20.75 per cent from October 1, 2016; and
  • (b)  20.50 per cent from January 7, 2017

of their total net demand and time liabilities in India as on the last Friday of the second preceding fortnight, valued in accordance with the method of valuation specified by the Reserve Bank from time to time; and<

(ii) such SLR assets shall be maintained by:

A. Scheduled commercial banks and local area banks, as –

  • (a)  cash; or
  • (b)  gold as defined in Section 5(g) of Banking Regulation Act, 1949 valued at a price not exceeding the current market price: or
  • (c)  unencumbered investment in any of the following instruments [hereinafter referred to as Statutory Liquidity Ratio securities (“SLR securities”)], namely:-
    • (1)  Dated securities of the Government of India issued from time to time under the market borrowing programme and the Market Stabilization Scheme; or
    • (2)  Treasury Bills of the Government of India; or 3) State Development Loans (SDLs) of the State Governments issued from time to time under the market borrowing programme:
  • (d)  the deposit and unencumbered approved securities required, under sub-section (2) of section 11 of the Banking Regulation Act, 1949(10 of 1949), to be made with the Reserve Bank by a banking company incorporated outside India;
  • (e)  any balance maintained by a scheduled bank with the Reserve Bank in excess of the balance required to be maintained by it under section 42 of the Reserve Bank of India Act,1934 (2 of 1934);

Provided that the instruments referred to in items (1) to (3) above that have been acquired under reverse repo with Reserve Bank of India, shall not be included as SLR securities for the purpose of maintenance of SLR assets up to October 2, 2016.

Maintenance of Cash Reserve Ratio (CRR)

Reserve Bank of India has decided to reduce the Cash Reserve Ratio (CRR) of Scheduled Commercial Banks by 25 basis points from 4.25 per cent to 4.00 per cent of their Net Demand and Time Liabilities (NDTL) with effect from the fortnight beginning February 09, 2013 vide circular DBOD.No.Ret.BC.76/ 12.01.001 /2012-13 dated January 29, 2013. The Local Area Banks shall also maintain CRR at 3.00 per cent of its net demand and time liabilities up to February 08, 2013 and 4.00 per cent of its net demand and time liabilities from the fortnight beginning from February 09, 2013.

Simple Language – Applicable Rate of CRR is 4%

Reserve Funds (Section 17)

Every banking company incorporated in India is required to create a Reserve Fund and to transfer at least 25% of its profit to the reserve fund. The profit of the year as per the profit and loss account prepared under Section 29 is to be taken as base for the purpose of such transfer and transfer to reserve fund should be made before declaration of any dividend.

If any banking company makes any appropriation from the reserve fund or share premium account, it has to report to the Reserve Bank of India the reasons for such appropriation within 21 days.

Note: Students shall ensure that 25% of the profit earned during current year is transferred as Statutory Reserve even if the question is silent on the issue in the examination question.

Capital Adequacy Ratio (CAR)

Every bank should maintain a minimum capital adequacy ratio based on capital funds and risk assets. As per the prudential norms, all Indian scheduled commercial banks (excluding regional rural banks) as well as foreign banks operating in India are required to maintain capital adequacy ratio (or capital to Risk Weighted Assets Ratio) which is specified by RBI from time to time. At present capital adequacy ratio is 9%.

Rates of Provisioning for Non-Performing Assets

Category of AdvancesRevised Rate (%)
Standard Advances
(a) direct advances to agricultural and SME0.25
(b) advances to Commercial Real Estate (CRE) Sector1.00
(C) all other loans and advances not included in (a) and (b) above0.40
Sub- standard Advances
• Secured Exposures15
• Unsecured Exposures25
• Unsecured Exposures in respect of Infrastructure loan accounts where certain safeguards such as escrow accounts are available20
Doubtful Advances – Unsecured Portion100
Doubtful Advances – Secured Portion
• For Doubtful upto 1 year25
• For Doubtful > 1 year and upto 3 years40
• For Doubtful > 3 years100
Loss Advances100

Risk Weights %

Sr. No.Item of asset or liabilityRisk Weight %
I.Balances
1.Cash, balances with RBI0
2.i. Balances in current account with other banks20
ii. Claims on Bank20
IIInvestments (Applicable to securities held in HTM)
1.Investments in Government Securities.0
2.Investments in other approved securities guaranteed by Central!  State Government.

Note: If the repayment of principal I interest in respect of State Government Guaranteed securities included in item 2, 4 and 6 has remained in default, for a period of more than 90 days banks should assign 100% risk weight. However the banks need to assign 100% risk weight only on those State Government guaranteed securities issued by the defaulting entities and not on all the securities issued or guaranteed by that State Government.

0
3.Investments in other securities where payment of interest and repayment of principal are guaranteed by Central Govt. (This will include investments in Indira/Kisan Vikas Patra (IVP/KVP) and investments in Bonds and Debentures where payment of interest and principal is guaranteed by Central Govt.)0
4Investments in other securities where payment of interest and repayment of principal are guaranteed by State Governments.0
5Investments in other approved securities where payment of interest and repayment of principal are not guaranteed by Central/State Govt.20
6Investments in Government guaranteed securities of Government Undertakings which do not form part of the approved market borrowing programme20
7Claims on commercial banks.

Note: The exposure of Indian branches of foreign banks, guaranteed/ counter-guaranteed by overseas Head Offices or the bank’s branch in other country, would amount to a claim on the parent foreign bank and the risk weight of such exposure would depend upon the rating (assigned by the international rating agencies) of the overseas parent of the Indian branch.

20
8Investments in bonds issued by other banks20

For all  Updates and Amendments applicable for May 2017, Please download below latest Study Material File for Banking chapter applicable for May 2017

Download Banking Chapter Study Material Relevant for May 2017

Dear Friend Due to Very big list we provide all Risk Weights in PDF Format Please download Below PDF For all latest Risk Weights applicable for Nov 2015 Exams

Click Here to Download Complete List

About Raju Choudhary

Article by Raju Choudhary Raju has written 810 articles. If you like This post, you can follow CAknowledge on Twitter. Subscribe to CAknowledge feed via RSS or EMAIL to receive instant updates.

7 comments

  1. Will you share us the elements of capital tier ii. Plzz

  2. Vishal prajapati

    may 2017 k liye SLR kitna applicable he…?
    20.75% ya 20.5%….i am confused…..

  3. Thanks 4 such a useful information

  4. Are you sure that RRBs have to maintain both CRR and SLR ? Sorry for my question but I am too confused.Please tell me.

  5. Thanks a lot bro!!! for sharing such a valuable suggestion with all,
    due to negligence or ignorance of ICAI study material our hardworking frnds may no get the Results they deserve.

    again Thank You Very Much

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