Urban Co-operative Banks Miscellaneous Directions · RBI/DoR/2025-26/294

RBI/DoR/2025-26/294 DoR.SOG(SPE).REC.No.213/13-04-001/2025-26

November 28, 2025

Reserve Bank of India (Urban Co-operative Banks - Miscellaneous) Directions

Table of Contents

Chapter I – Preliminary A. Short Title and Commencement B. Applicability C. Definitions

Chapter II – Role of the Board A. Board Approved Policy

Chapter III – Depositor Education and Awareness Fund A. Definitions B. Credits to the Fund C. Refunds and Interest D. Registration Guidelines E. Procedural Guidelines for Transfer and Claim F. Returns G. Disclosure in Notes to Accounts H. Audit I. Preservation of Records J. Furnishing of Information K. Contact Details L. Interpretation of the Provisions of the Scheme

Chapter IV – Services and Market Operations A. Participation in Currency Futures B. Camps and Campaigns for Periodic Updation of KYC

Chapter V – Regulatory Compliance and Legal Matters A. Change in Bank’s Name B. Display of Bank’s Name C. Court Directives

Chapter VI – Financial Conduct and Prohibited Activities A. Membership of Mahila Urban Co-Operative Banks B. Restriction on Holding Shares in Other Co-operative Societies C. Donations / Contributions for Public / Charitable purposes D. Payment of Bonus E. Prohibition on Acceptance of Deposits at the Instance of Private Financiers / Unincorporated Bodies F. Prohibition on Association with Prize Chit Schemes and Sale of Lottery Tickets

Chapter VII – Operational and Administrative Matters A. Mandatory Leaves

Chapter VIII – Financial Restructuring

Chapter IX – Opting out of the Purview of the Banking Regulation Act, 1949 A. Salary Earners’ / Employees’ Co-operative Bank B. Other UCBs

Chapter X – Repeal and Other Provisions A. Repeal and Saving B. Application of Other Laws not Barred C. Interpretations

Annex I Annex II Annex III Annex IV Annex V Annex VI Annex VII Annex VIII Annex IX Annex X Annex XI

In exercise of powers conferred by Section 26A and Section 35A read with Section 56 of the Banking Regulation Act, 1949, as amended vide Banking Regulation (Amendment) Act 2020 (39 of 2020) 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 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 - Miscellaneous) Directions, 2025.

2. These Directions shall come into force with immediate effect.

B. Applicability

3. These Directions shall be applicable to Urban Co-operative Banks (hereinafter collectively referred to as 'banks' and individually as a '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).

C. Definitions

4. In these Directions, unless the context otherwise requires, (1) 'BR Act' means the Banking Regulation Act, 1949 (10 of 1949); and (2) ‘DICGC' means the Deposit Insurance and Credit Guarantee Corporation established under Section 3 of the Deposit Insurance Corporation Act, 1961.

5. All other expressions, unless defined in the individual chapters below, 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 the RBI, or as used in commercial parlance, as the case may be.

Chapter II – Role of the Board

A. Board Approved Policy

6. A bank shall have a Board-approved policy for ‘Mandatory Leave’ as specified in paragraph 49 of these Directions and the same shall be periodically reviewed and updated.

Chapter III – Depositor Education and Awareness Fund

A. Definitions

7. In this chapter, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below: (1) ‘Committee’ means the Committee constituted under the Fund; (2) 'Fund' means the Depositor Education and Awareness Fund established by RBI under the Scheme notified vide Gazette Notification dated May 24, 2014, hereinafter referred to as the Scheme; (3) 'Liquidator' means liquidator of a bank appointed under any law for the time being in force; (4) 'Principal amount' means the amount, including interest, transferred by a bank to the Fund in terms of Section 26A of the Act; and (5) 'Amount due' means any credit balances in any account or any deposit in a bank remaining unclaimed or inoperative for ten years or more;

B. Credits to the Fund

8. A bank shall credit to the Fund the credit balance in any of the deposit account maintained with the bank which have not been operated upon for ten years or more, or any amount remaining unclaimed for ten years or more, as applicable to the banking entity.

Explanation: A bank shall deposit the amounts to be credited to the Fund in the specified account maintained with RBI. The procedure for transfer is specified in paragraph 17 of these Directions.

9. A bank shall transfer to the Fund the entire amount as specified in the above paragraph, including the accrued interest that the bank would have been required to pay to the customer / depositor as on the date of transfer to the Fund.

10. Any expenditure incurred for the promotion of depositors’ education, awareness, interests and other purposes that may be specified by RBI under Section 26A (4) of the Act, shall be charged to the Fund.

C. Refunds and Interest

11. In case of demand from a customer / depositor (or legal heirs in case of deceased depositors) whose unclaimed amount / deposit had been transferred to the Fund, a bank shall repay the customer / depositor, along with interest if applicable, and lodge a claim for refund from the Fund for an equivalent amount paid to the customer / depositor.

Explanation: While there is no specific time limit prescribed in the Scheme for claiming a refund from the Fund by a customer / depositor, customers, depositors or legal heirs [in case of deceased depositor(s)] are encouraged to claim such amounts as soon as they become aware of unclaimed amounts.

12. The interest payable, if any, from the Fund on a claim shall accrue only from the date on which the balance in an account was transferred to the Fund to the date of payment to the customer / depositor. No interest shall be payable in respect of amounts refunded from the Fund, in respect of which no interest was payable by the bank to its customer / depositor.

13. A bank shall calculate the interest payable (by a bank to its depositors / claimants) on principal amount of unclaimed interest bearing deposits transferred to the Fund at the rate of 4 percent per annum up to June 30, 2018, 3.5 percent w.e.f. July 1, 2018 up to May 10, 2021 and at 3 percent with effect from May 11, 2021 till the time of payment to the depositor / claimant. Changes to the rate of interest, if any, payable on the principal amount transferred to the Fund shall be specified by RBI from time to time.

Explanation: The amount of interest payable in this behalf shall be calculated in the manner specified in paragraph 17 of these Directions and by rounding off the amount of interest to the nearest rupee.

14. In the case of a bank under liquidation, during the pendency of the liquidation proceedings, if any claim is received from depositors whose deposits were covered by DICGC insurance at the time of transfer to the Fund, the Fund shall pay to the liquidator, an amount equal to the amount that could have been claimed from DICGC with respect to such deposits, and with respect to all other amounts paid by the liquidator towards the amounts transferred to the Fund, whether insured by DICGC or not, the Fund shall reimburse the liquidator.