The Reserve Bank of India has issued the Urban Co-operative Banks – Prudential Norms on Capital Adequacy Directions, 2025 under Sections 35A and 56 of the Banking Regulation Act, 1949, with immediate effect. These Directions apply to all Urban Co-operative Banks (UCBs), defined as Primary Co-operative Banks under the Act, and lay down binding prudential norms governing capital adequacy. Issued in public interest and in furtherance of sound banking policy, the framework seeks to strengthen the financial resilience, solvency, and risk-bearing capacity of UCBs. By standardising capital adequacy requirements, the Directions aim to enhance depositor protection, improve balance sheet strength, and align UCB regulation with evolving supervisory expectations. Compliance with the prescribed capital norms is mandatory, reinforcing RBI’s supervisory oversight and prudential control over the urban cooperative banking sector. The Directions mark a key regulatory step toward ensuring stability and sustainability in UCB operations through adequate capital buffers.
RESERVE BANK OF INDIA
RBI/DOR/2025-26/275
DOR.CAP.REC.194/09-18-201/2025-26 | Dated: November 28, 2025
Reserve Bank of India (Urban Co-operative Banks – Prudential Norms on Capital Adequacy) Directions, 2025
In exercise of powers conferred by Section 35A read with Section 56 of the Banking Regulation Act (BR Act), 1949, the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest and in the interest of banking policy so to do, hereby, issues the 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 – Prudential Norms on Capital Adequacy) Directions, 2025.
2. These Directions shall come into effect immediately upon issuance.
B. Applicability
3. These Directions shall be applicable to Urban Co-operative Banks (hereinafter collectively referred to as ‘banks’ or ‘UCBs’ and individually as a ‘bank’ or ‘UCB’).
For the purpose of these Directions, 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/275MD3D20366A706C4C13B4FA21A3DC0451A1.PDF
