Primary (Urban) Co-operative Banks, State Co-operative Banks (SCBs) and District Cetral Co-operative Banks (DCCBs) are not permitted to extend any loans and advances to stock brokers against shares, debentures and bonds. However, urban Co-operative Banks can lend to individuals against the primary/collateral security of shares/debenture, limited to Rs.5 lakh if the security is in physical form and up to Rs.10 lakh if the security is in demat form. Reserve Bank of India/National Bank for Agriculture and Rural Development have not come across any instance of irregular loans and advances to stockbrokers against the security of shares/debentures/bonds during the current financial year.
This information was given by Shri S. S. Palanimanickam, Minister of State for Finance, in reply to a question by Shri C. Ramchandraih in Rajya Sabha today.
BSC/BY/CS-152/05
(Release ID :7786)