CA Aaditya Chhajed
Quick Summary
Investment options for Co-operative Banks and Societies As per RBI Master Circular on Investments by Primary (Urban) Co-operative Bank and the recent amendment to the Indian Trust Act in 2017, Co-operative Societies can invest in many financial instruments. Traditionally, the funds which are i
Daily Limit Reached
You have reached your daily limit of 2 Free Articles
Subscribe to CCI PRO for unlimited access
Why Upgrade to CCI PRO?
- No Ads
- WhatsApp Broadcasts
- Daily E-Newsletter
- Unlimited Articles Access
BEST VALUE
2 YEAR PLAN
3,499
(Inclusive of GST)
1 YEAR PLAN
1,999
(Inclusive of GST)
View all CCI PRO benfits
Already a PRO member? Login here for an ad-free experience.
FAQ :
Yes, following the amendment to the Indian Trust Act in 2017, co-operative societies can invest in specified mutual funds.
Co-operative banks can invest in any debt mutual fund as per the RBI Master Circular. They are not permitted to invest in equity.
For deposits with a 5+ year time horizon, co-operative societies should consider investing a portion (e.g., 10%) in equity mutual funds, focusing on international diversification and capital protection.
For funds with a horizon of less than 5 years, it is advisable to invest in debt funds like liquid funds or overnight funds, which offer liquidity, safety, and returns in the range of 3-5% per annum.
When evaluating debt funds, key criteria include assets under management, the ratings of the fund's securities (preferably AAA/Sovereign), the duration of underlying securities, and the history of the AMC/fund management team.
CAclubindia
