Ahmedabad
A similar order is now expected from the Urban Development Department that controls the Urban Cooperative Banks, says sources
Updated : Apr 04, 2018, 06:05 AM IST
Cooperative Banks in the state are expecting a central order to spread out their Mark-To-Market losses incurred as the yields of government securities have dropped, after the RBI on Tuesday allowed Public Sector Banks and private banks to spread out the provisioning to cover the losses over four quarters.
A similar order is now expected from the Urban Development Department that controls the Urban Cooperative Banks, said sources. Following a massive inflow of deposits after demonetisation, banks had to increase their investments in government securities to maintain their Statutory Liquidity Ratio. However, the yields had dropped significantly by the end of the financial year. The banks had approached the government and RBI for a solution.
The rise in yields of the bonds on the last day of the fiscal saved the day for the banks as losses were drastically minimized, said Jyotindra Mehta, chairman of Gujarat Urban Cooperative Banks Federation. "We are told that the notification will be out in a day or two," said Mehta. "These are just notional losses. But a provision had to be made in the books of account."