RBI Permits ‘Urban Cooperative Banks’ to Transfer Balances in Dividend Equalisation Fund to Free Reserves

Blog|News|FEMA & Banking|
< 1 minute

By Taxmann
|
Last Updated on 1 August, 2024

Urban Cooperative Banks

Circular No. RBI/2024-25/57 DOR.CAP.REC.No.30/09.18.201/2024-25; Dated: 30.07.2024

RBI has issued guidelines on the treatment of the Dividend Equalisation Fund (DEF) for primary urban cooperative banks (UCBs). RBI observed that some UCBs had created the DEF through the appropriation of profits, intending to utilise these balances to pay dividends in future years when profits are insufficient or where the bank has posted a net loss. Accordingly, RBI now permits UCBs to transfer the balance in DEF to general reserves/free reserves. The circular is applicable with immediate effect.

Click Here To Read The Full Circular

Disclaimer: The content/information published on the website is only for general information of the user and shall not be construed as legal advice. While the Taxmann has exercised reasonable efforts to ensure the veracity of information/content published, Taxmann shall be under no liability in any manner whatsoever for incorrect information, if any.