)
The Reserve Bank of India (RBI) today prohibited urban cooperative banks (UCBs) to make donations to the trusts and institutions in which their directors and relatives of the banks hold position or are interested in these trusts and institutions.
“It has been brought to our notice that some of the UCBs have made contributions which are in the nature of donations to the trusts for charitable or benevolent objective or for any exhibition in which the directors or relatives are interested” central bank statement said adding “in view of this, UCBs are, with immediate effect, prohibited from giving donations to trusts and Institutions, where directors, and/or their relatives hold position or are interested, even within the permissible ceiling of 1% of the published profits of the bank for the previous year. ”
In 2005, central bank had issued a circular saying normal donations of the UCBs shouldn’t exceed 1% of their published profits of last year and if the donations are made to state and union government’s recognised or sponsored funds then it shouldn’t exceed 2% of their published profits for the previous year.
