RBI master-direction RBI/DOR/2025-26/273 · 28 Nov 2025
Official title
Reserve Bank of India (Urban 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 Urban Co-operative Banks (UCBs). UCBs must maintain at least two professional directors, except for Salary Earners' Co-operative Banks. Directors face a ten-year tenure limit followed by a three-year cooling-off period. UCBs must establish an Audit Committee and, if assets reach ₹5000 crore, a Risk Management Committee. UCBs with deposits of ₹100 crore or more must constitute a Board of Management. The directions mandate specific review calendars for boards and define roles for Chief Executive Officers and Chief Risk Officers. UCBs must obtain RBI approval for CEO appointments and report governance data. These directions replace previous governance guidelines for UCBs.
What you must do
Key dates
Who is affected
Thresholds
Exceptions
If you do not comply
RBI/DOR/2025-26/273 DOR.GOV.REC.No.192/18.10.014/2025-26 November 28, 2025 Previous Versions
Chapter-I Preliminary A. Short title and commencement B. Applicability C. Definitions
Chapter-II Constitution of Board and Appointment of Directors
Chapter-III Role of the Board and Individual Directors
Chapter-IV Calendar of Reviews
Chapter-V Committees of the Board A. Audit Committee of the Board B. Risk Management Committee
Chapter-VI Board of Management
Chapter-VII Appointment of Key Officers A. Appointment of Chief Executive Officer (CEO) / Managing Director (MD) B. Appointment of Chief Risk Officer (CRO)
Chapter-VIII Repeal and other provisions
Annex I
Annex II
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.
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.
In these directions, unless the context states otherwise, the terms herein shall bear the meanings assigned to them below: (1) 'Board' means the Board of Directors ('BoD') or the governing body of a UCB, by whatever name called, to which the direction and control of the management of affairs of the UCB is entrusted. (2) 'Director' means a director appointed on the Board of a UCB, by way of election or co-option or in any other manner as per the applicable laws. (3) 'Salary Earners' Co-operative Bank' shall mean a primary co-operative bank whose membership is confined to persons who are or were employed in an institution or a group of institutions and recognised as such by the Reserve Bank.
All other expressions, unless defined herein, shall have the same meaning as have been assigned to them under the Reserve Bank of India Act, 1934 or the Banking Regulation Act, 1949, or any statutory modification or re-enactment thereto, or Glossary of Terms published by RBI or as used in common or commercial parlance, as the case may be.
Provided that, the requirement of having at least two professional directors shall not be mandatory in the case of a UCB which is a Salary Earners' Co-operative Bank.
[^1]7A. A director on the Board of a UCB, 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 UCB 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 UCB 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 UCB 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.
The primary responsibility of the BoD of a UCB is to formulate policies keeping in view the applicable statutory provisions and directions / guidelines issued by the RBI. Additionally, the Board shall - (1) exercise overall supervision and control over the functioning of the UCB, leaving the day-to-day administration to the Managing Director (MD) / Chief Executive Officer (CEO); (2) constitute various committees of the Board and the Board of Management (BoM) to assist the Board in carrying out its responsibilities; and (3) delegate powers to the various committees as considered appropriate, subject to the regulatory provisions.
A UCB shall ensure to place all circulars and other material relating to policies issued by the RBI before its Board for information and appropriate action. Further, the management shall furnish full facts and complete papers to the directors well in advance of Board meetings as also all additional information / clarification that the directors may seek before taking a decision.
In addition to their specified duties, responsibilities, rights or obligations outlined or laid down in the relevant statutes, as applicable, the directors of a UCB shall be guided inter alia by the following guidelines: (1) The directors should attend Board meetings regularly and effectively. They should study the Board papers thoroughly and seek the assistance of the MD / CEO for eliciting any information at the Board meetings. They should, however, not directly call for papers / files / notes recorded by various departments for scrutiny, etc. in respect of agenda items to be discussed in the meetings. (2) The directors are expected to ensure confidentiality of the UCB's agenda papers / notes. They should not reveal any information relating to any constituent of the UCB to anyone as they are under the oath of secrecy and fidelity. (3) The directors should involve themselves thoroughly in the matter of formulation of general policy and ensure that performance of the UCB is monitored adequately at the Board level. They should not issue / give any instructions / direction to any individual officer / employee of the UCB in any manner and should also discourage the individual officer / employee or unions from approaching them in any manner. (4) The directors should be familiar with the broad objectives of the UCB and the policies laid down by RBI. They should analyse the trends of economy, assist in the discharge of management's responsibility to public and formulation of measures to improve customer service. (5) The Board should function in a cohesive manner and provide proper leadership to manage the affairs of the UCB on smooth and efficient lines. The directors must work as a team and in the spirit of co-operation. (6) The directors should oversee all critical aspects of the UCB's functioning - ranging from compliance with regulatory policies and maintenance of statutory ratios to efficient fund management, priority sector lending, asset quality, recovery performance, internal controls, and operational transparency - to ensure sound governance, financial health, and service to its members. (7) The directors should not involve themselves in any matter relating to personnel administration such as appointment, transfer, posting or promotion, or redressal of individual grievances of any employee. They should not do anything which will interfere with and / or be subversive of maintenance of discipline, good conduct and integrity of the staff. (8) The directors should not approach or exert influence for sanction of any kind of facility by the UCB. They should also not sponsor any loan proposal, buildings or sites for UCB's premises, enlistment or empanelment of contractors, architects, doctors, lawyers, etc. At the same time, they should not be prejudiced against individual proposals. (9) The directors should not participate in the Board discussion if a proposal in which they are directly or indirectly interested comes up for discussion. They should disclose their interest well in advance to the MD / CEO and the Board. (10) The directors should not display the logos or distinctive design of the UCB on their visiting card or letter head, although they may indicate their directorship of the UCB on the same.
