EC.No. 246 /DoS-24/2019
06 August 2019
Ref No. DoS. Pol. HO./1830 /Policy/J-1/2019-20
The Chief Executive Officer
All State Cooperative Banks
All District Central Cooperative Banks
Inclusion of Net Credit balance in branch adjustment account for Computation of DTL
Please refer to our Circular No.101/DoS-16/2008 (DoS. HO. Pol/1148/J-1/2008-09) dated 27 June 2008 wherein we had issued instructions regarding maintenance of CRR & SLR & calculation of Demand and Time Liabilities (DTL) and further clarifications on the treatment to be given to undisbursed profit & credit balance in P & L Account vide our circular No.234/DoS-28/2010 (DoS. HO. Pol/3300/J-1/2010-11) dated 3 December 2010.
2. In continuation thereof, we now advise as under: -
i. The net credit balances in branch adjustment account is to be included as part of ‘Other Demand and Time Liabilities’ (ODTL) (i.e. under II (c) of Form 1) for the purpose of CRR and SLR calculations in respect of Non-Scheduled StCBs and DCCBs. In case of Scheduled StCBs, the same is to be reported as part of ‘ODL’ under B.2 (1)(c).
ii. For this purpose, the bank should segregate the credit entries outstanding for more than 5 years in Inter-branch adjustment account as ‘Blocked Account’ and report it under Form 1 and Form B.2.(1)(c) respectively as indicated in para (i) above. Thereafter, arrive at net amount of inter-branch transactions for inclusion under
a. ‘ODTL’ (II (c) of Form I) if in credit (for Non-Scheduled StCBs/DCCBs) & ‘ODL’ under B.2(1)(c) for Scheduled StCBs
b. ‘Any other Assets’ under III (iv) for Non Scheduled StCBs/DCCBs or under ‘Other Assets’ (III (d), for Scheduled StCBs, if in debit.
c. the aggregate amount of ‘Blocked Account’ should be excluded and only the amount representing the remaining credit entries (less than 5 years) should be netted against the debit entries (irrespective of age). The balance in the ‘Blocked Account’ will be reckoned for the purpose of maintenance of CRR and SLR, even if the net of inter-branch entries is a debit balance.
iii. In case if the net of inter-branch entries above six months is a debit balance, then 100% provision is to be made. This is arrived at by netting all debit entries above 6 months and credit entries above 6 months but below 5 years as per extant instructions.
A few Illustrations in this regard is furnished in Annexure I.
3. The necessary changes have been effected in ENSURE Returns. All StCBs and DCCBs may report the net credit balances as detailed above in the applicable Form/ENSURE portal w.e.f the fortnight commencing 28 September 2019 based on their position of DTL as on 13 September 2019.
4. Please acknowledge the receipt of this circular to our Regional Office concerned.
(K. R. Rao)
Chief General Manager
Encl: -as above