RBI master-direction RBI/DOR/2025-26/298 · 28 Nov 2025
Official title
Reserve Bank of India (Rural Co-operative Banks - Governance) Directions, 2025 (Updated as on May 25, 2026)
Summary
Check the official recordThe Reserve Bank of India establishes governance standards for Rural Co-operative Banks (RCBs), including State Co-operative Banks and Central Co-operative Banks. The directions mandate board composition requirements, including professional expertise, and set eligibility criteria for directors. Directors face a ten-year tenure limit followed by a three-year cooling-off period. RCBs must obtain prior RBI approval for the appointment or termination of a Chief Executive Officer or Managing Director via the PRAVAAH portal. The board must establish a Code of Conduct, an Audit Committee, and a Risk Management Committee. RCBs must follow specific board meeting agendas and review calendars. These directions repeal previous governance instructions while maintaining existing legal actions and obligations.
What you must do
Key dates
Who is affected
Thresholds
Exceptions
RBI/DOR/2025-26/298 DOR.GOV.REC.No.217/18.10.015/2025-26 November 28, 2025
Previous Versions
Reserve Bank of India (Rural Co-operative Banks - Governance) Directions, 2025 (Updated as on May 25, 2026)
Table of Contents
Chapter I - Preliminary A. Short title and commencement B. Applicability C. Definitions
Chapter II - Constitution of Board and Appointment of Chief Executive Officer (CEO) / Managing Director (MD)
Chapter III - Role of the Board and Individual Directors A Role of Board of Directors B. Code of conduct
Chapter IV – Board Meeting Procedures A. Model Agenda of Board Meetings B. Calendar of Reviews
Chapter V – Committees of the Board A. Audit Committee of Board B. Risk Management Committee
Chapter VI – Repeal and other provisions A. Repeal and saving B. Application of other laws not barred C. Interpretations
Annex
In exercise of the powers conferred by Section 35A read with Section 56 of the Banking Regulation Act, 1949 and all other provisions / laws enabling the Reserve Bank of India (‘RBI’) in this regard, RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Directions hereinafter specified.
These Directions shall be called the Reserve Bank of India (Rural Co-operative Banks - Governance) Directions, 2025.
These Directions shall come into force with immediate effect.
In this context, ‘rural co-operative banks’ shall mean State Co-operative Banks (collectively referred to as ‘StCBs’ and individually as ‘StCB’) and Central Co-operative Banks (collectively referred to as ‘CCBs’ and individually as ‘CCB’), as defined in the National Bank for Agriculture and Rural Development Act, 1981.
(1) 'Board’ means the Board of Directors (‘BoD’) or the governing body of an RCB, by whatever name called, to which the direction and control of the management of affairs of the RCB is entrusted.
(2) ‘Director’ means a director appointed on the Board of an RCB, by way of election or co-option or in any other manner as per the applicable laws.
The directors of an RCB should be knowledgeable and persons of high integrity. They must function in a cohesive manner and provide leadership for the smooth and efficient management of the affairs of the RCB.
The following persons shall not be eligible to become directors of an RCB:
(1) those who are not eligible for admission even as members (except co-opted and nominated directors);
(2) those engaged in money lending, financing and investment activities, either in individual capacity or as proprietor / partner / employee / director of any concern; and
(3) those convicted of any criminal offense involving moral turpitude.
7A. A director on the Board of an RCB, after completing a continuous tenure of ten years in office, shall be eligible to be re-appointed, whether by election or co-option or in any other manner, as a director on the Board of the same RCB only after undergoing a minimum cooling-off period of three years. During the cooling-off period, the said director shall not be associated with the RCB in any capacity / manner other than as a member / customer. This, however, shall not preclude him / her from being appointed as a director on the Board of another bank, if otherwise eligible.
Explanation:
For calculating the period of continuous tenure, the total time served on the Board of the RCB including the period of directorship preceding an interruption of less than three years but excluding the period of directorship preceding at least a three-year interruption shall be reckoned.
To ensure professionalism in the Board, an RCB shall have at least two directors with suitable banking experience (at middle / senior management level) or with relevant professional qualifications i.e., in areas of accountancy / banking / agriculture and development / legal / auditing. An RCB should also have a suitable provision in its byelaws to ensure such professionals on its Board.
The appointment, reappointment, and termination of appointment of a Chief Executive Officer (CEO) / Managing Director (MD) shall, in terms of Section 35B(1)(b) read with Section 56 of the Banking Regulation Act, 1949, require the prior approval of RBI. Applications in this regard shall be submitted to RBI through the PRAVAAH portal (https://pravaah.rbi.org.in).
(1) formulation of policies;
(2) exercising overall supervision and control over the functioning of the RCB, leaving day to day administration to the CEO / MD of the RCB.
Explanation: Senior Management shall include top Executives at the level of General Managers and functional heads.
The Code of Conduct shall set forth the guiding principles on which an RCB will operate and conduct its daily business with its multitudinous stakeholders, government and regulatory agencies, media, and anyone else with whom it is connected. It shall recognize that the RCB is a trustee and custodian of public money and in order to fulfil its fiduciary obligations and responsibilities, it has to maintain and continue to enjoy the trust and confidence of public at large. The RCB shall continue to initiate policies which are customer centric, and which promote financial prudence.
The Code of Conduct shall be signed by the Directors of an RCB in witness of RCS and NABARD to ensure adherence.
The directors of an RCB shall adhere to Do's and Don'ts envisaged in the Code of Conduct as set out below:
(1) Corporate Governance: The Directors of an RCB should:
(i) be fully aware of the provisions of BR Act, 1949, the bank’s byelaws and regulatory prescriptions of RBI/NABARD;
(ii) attend the Board meeting regularly and participate effectively;
(iii) receive agenda notes in advance and examine as regards to quality of content and coverage;
(iv) involve themselves in formulation and adoption of various policies such as credit policy, human resource policy, procurement policy, IT policy, cybersecurity policy, etc. and monitoring implementation of such policies at Board meetings;
(v) ensure adoption of a proper HR policy in relation to recruitment, placement, promotion, transfer and training;
(vi) be aware of latest developments in banking technology and strive for adoption of these technologies;
(vii) review functioning of various Board level / management level Committees viz., audit committee, HR committee, investment committee, ALCO, risk management committee, Frauds Committee, etc.;
