The Reserve Bank of India issued the Reserve Bank of India (Urban Co-operative Banks – Credit Facilities) Directions, 2025 on 28 November 2025, consolidating existing regulatory instructions governing credit facilities extended by Urban Co-operative Banks (UCBs). Issued under Sections 21, 35A, and 56 of the Banking Regulation Act, 1949, the Directions reflect the Reserve Bank’s statutory mandate to regulate the credit system while promoting innovation, orderly growth, financial stability, and protection of depositors’ and borrowers’ interests. The framework recognises the progressive deregulation of bank credit and positions prudential norms as essential safeguards for sound credit delivery. These Directions provide structured guidance to UCBs on the design and delivery of credit-related products and services, ensuring consistency and regulatory clarity. The Directions apply to all Primary Co-operative Banks as defined under the Banking Regulation Act and come into effect immediately upon issuance, unless otherwise specified, thereby standardising credit practices across the urban co-operative banking sector.
RESERVE BANK OF INDIA
RBI/DOR/2025-26/277
DOR.CRE.REC.196/07-01-005/2025-26 | Dated: November 28, 2025
Reserve Bank of India (Urban Co-operative Banks – Credit Facilities) Directions, 2025
Introduction
Reserve Bank of India (Reserve Bank) is statutorily mandated to operate the credit system of the country to its advantage. In pursuit of this mandate, the Reserve Bank encourages innovation in the financial systems, credit products and delivery mechanisms while ensuring orderly growth, financial stability and the protection of depositors’ and borrowers’ interest. With the progressive deregulation of bank credit, prudential norms primarily serve as regulatory safeguards. These norms, issued from time to time, provide guidance to Urban Cooperative Banks (UCBs) on the design and delivery of credit-related products and services. These Directions consolidate the instructions issued to Urban Co-operative Banks on credit facilities.
Accordingly, in exercise of powers conferred by Section 21, 35A and 56 of the Banking Regulation Act, 1949, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby issues these Directions hereinafter specified.
Chapter I – Preliminary
A. Short Title and Commencement
1. These Directions shall be called the Reserve Bank of India (Urban Co-operative Banks – Credit Facilities) Directions, 2025.
2. These Directions shall come into effect immediately upon its issuance, unless indicated otherwise in specific cases.
B. Applicability
3. These Directions shall be applicable to Urban Co-operative Banks (hereinafter collectively referred to as ‘UCBs/banks’ and individually as a ‘UCB/bank’).
In this context, urban co-operative banks shall mean Primary Co-operative Banks as defined under Section 5(ccv) read with Section 56 of Banking Regulation Act, 1949.
Read Full text of the Notification: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/277MDFF00147367D64F02899A3A756CDA9093.PDF
