Conflict between study material and practice manual.

Prudential Norms - Risk Weights for Computation of CRAR (StCBs/CCBs)

I. Domestic Operations

A. Funded Risk Assets

Items of Assets			Risk weight
I	Balances
	1	Cash (including foreign currency notes) & balances with RBI	0
	2	Balances in current account with other banks	20
II	Investments
	1	Investments in Government Securities	2.5
	2	Investment in other approved securities guaranteed by Central Government / State Governments	2.5
	3	Investments in other securities where payment of interest and repayment of principal are guaranteed by Central Govt. (include investment in Indira / Kisan Vikas Patras (IVP/KVP) and investments in bonds and debentures where payment of interest and repayment of principal is guaranteed by Central Government / State Governments)	2.5
	4	Investments in other securities where payment of interest and repayment of principal are guaranteed by State Governments Note : Investment in securities where payment of interest or repayment of principal is guaranteed by State Government and which has become a non-performing investment, will attract 102.5 percentage risk weight	2.5
	5	Investments in other approved securities where payment of interest and repayment of principal are not guaranteed by Central / State Governments.	22.5
	6	Investments in government guaranteed securities of government undertakings which do not form part of the approved market borrowing program	22.5
	7	Claims on commercial banks, District Central Cooperative Banks and State Cooperative Banks, such as fixed deposits, certificates of deposits, money at call and short notice, etc.	22.5
	8	Investments in bonds issued by All India Public Financial Institutions	102.5
	9	Investments in bonds issued by Public Financial Institutions (PFIs) for their Tier-II Capital	102.5
	10	All other investments Note: Intangible assets and losses deducted from Tier I capital should be assigned zero weight	102.5
	11	Off-balance sheet (net) position in 'When Issued' securities, scrip-wise	2.5
III	Loans and advances including bills purchased and discounted and other credit facilities
	1	Loans and advances guaranteed by Government of India	0
	2	Loans guaranteed by State Governments	0
	3	State Government guaranteed advance which has become a non performing asset	100
	4	Loans granted to Public Sector Undertakings (PSUs) of Government of India	100
	5	Loans granted to PSUs of State Governments	100
	6	Housing Loans (i) Loans to individuals (fully secured by mortgage of residential properties) up to Rs 30 lakh LTV ratio is equal to or less than 75% LTV ratio is more than 75%	50 100
	6	(ii) Housing – others	100
		* LTV ratio should be computed as a percentage of total outstanding in the account (viz. "principal + accrued interest + other charges pertaining to the loan" without any netting) in the numerator and the realizable value of the residential property mortgaged to the bank in the denominator
	7	Consumer credit including Personal loan	125
	8	Loans up to Rs. 1 lakh against gold and silver ornaments Note : Where the loan amount exceeds Rs. 1 lakh, the entire loan amount has to be assigned the risk weight applicable for the purpose for which the loan has been sanctioned.	50
	9	All other loans and advances including Education loan	100
	10	Loans extended against primary / collateral security of shares / debentures	125
	11	Leased assets	100
	12	Advances covered by DICGC / ECGC Note: The risk weight of 50% should be limited to the amount guaranteed and not the entire outstanding balance in the accounts. In other words, the outstanding in excess of the amount guaranteed, will carry 100% risk weight.	50
	13	Advances against term deposits, Life policies, NSCs, IVPs and KVPs where adequate margin is available	0
	14	Loans and advances granted by State/Central cooperative banks to their own staff , which are fully covered by superannuation benefits and mortgage of flat/house	20
		Notes : While calculating the aggregate of funded and non-funded exposure of a borrower for the purpose of assignment of risk weight, banks may 'net-off' against the total outstanding exposure of the borrower –
		(a) advances collateralized by cash margins or deposits;
		(b) credit balances in current or other accounts of the borrower which are not earmarked for specific purposes and free from any lien;
		(c ) in respect of any assets where provisions for depreciation or for bad debts have been made;
		(d) claims received from DICGC / ECGC and kept in a separate a/c pending adjustment in case these are not adjusted against the dues outstanding in the respective a/cs;
		(e) Subsidies received under various schemes and kept in a separate account
IV	Other Assets
	1	Premises, furniture and fixtures	100
	2	Interest due on Government securities	0
	3	Accrued interest on CRR balances maintained with RBI and claims on RBI on account of Government transactions (net of claims of government / RBI on banks on account of such transactions)	0
	4	Interest receivable on staff loans	20
	5	Interest receivable from banks	20
	6	All other assets	100
V	Market Risk on Open Position
	1	Market risk on foreign exchange open position (Applicable to Authorised Dealers only)	100
	2	Market risk on open gold position	100