Reserve Bank of India (Urban Co-operative Banks – Responsible Business Conduct) Directions, 2025

RBI/DOR/2025-26/292 DOR.MCS.REC.No.211/01-01-037/2025-26 November 28, 2025

Previous Versions Reserve Bank of India (Urban Co-operative Banks – Responsible Business Conduct) Directions, 2025 (Updated as on July 1, 2026)

Table of Contents Chapter I – Preliminary Chapter II – Institutional Framework Chapter III – Customer Service in Banks Chapter IV – Customer Guidance and Protection Chapter V – Financial Inclusion and Accessibility Chapter VI – Payment and Remittance Services Chapter VII – Deposit and Other Liabilities Chapter VIII – Responsible Lending Conduct Chapter IX – Miscellaneous Instructions Chapter X – Repeal and Other Provisions Annex I – Format of Comprehensive Notice Board Annex II – Rates at a Quick Glance Annex III- Forms of Inventory (Existing) Annex IV – Settlement of Claims (existing instructions) Annex V – Claim form for Accounts with nominee / survivorship clause Annex VI – Claim form for Accounts without nominee / survivorship clause Annex VII – Bond of Indemnity / Surety* Annex VIII – Letter of Disclaimer / No Objection Annex IX – Declaration / Affidavit Annex X – Form of Inventory of Contents of Safe Deposit Locker Annex XI – Form of Inventory of Articles left in Safe Custody Annex XII – Bond of Indemnity with respect to delivery of contents of safe deposit locker/articles kept in safe custody by the deceased customer Annex XIII – Key Facts Statement (KFS)

In exercise of the powers conferred by Sections 21, 35A, 45ZC(3), 45ZE(4) and 56 of Banking Regulation Act, 1949, and all other provisions / laws enabling the Reserve Bank of India (hereinafter called ‘the Reserve Bank’) in this regard, Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.

Chapter I – Preliminary

A. Short Tile and commencement

1. These Directions shall be called the Reserve Bank of India (Urban Co-operative Banks – Responsible Business Conduct) Directions, 2025.
2. These Directions shall become effective from the date of issue, unless indicated otherwise.

B. Applicability

3. These directions shall be applicable to all Urban Co-operative Banks (hereinafter collectively referred to as 'UCBs' and individually as a 'UCB').

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 states otherwise, the terms herein shall bear the meaning assigned to them below:

(1) ‘Accounts with survivorship clause’ refers to joint deposit accounts styled as ‘either or survivor’, or ‘anyone or survivor’, or ‘former or survivor’ or ‘latter or survivor’ or any other such clause.

(2) ‘Apostille’ refers to a certificate that authenticates the origin of a public document (e.g., a birth, marriage or death certificate, a judgment, an extract of a register or a notarial attestation). Apostilles can only be issued for documents issued in one country party to the Hague Apostille Convention and that are to be used in another country which is also a party to the Convention. In India, such attestations are done by Ministry of External Affairs.

(3) Annual Percentage Rate (APR) means the annual cost of credit to the borrower which includes interest rate and all other charges associated with the credit facility.

(4) Bank induced transaction means a transaction in the account initiated by a UCB as per its extant policy such as charges, fees, interest payments, penalties, taxes. Note: Illustrative list of bank induced transactions is as under: (i) All types of charges levied by banks including taxes deducted. (ii) Interest paid on savings bank account balances.

(5) Bank Rate refers to the rate published by Reserve Bank in terms of Section 49 of the Reserve Bank of India, 1934.

(6) Consumer Credit refers to the loans given to individuals, which consists of (i) loans for consumer durables, (ii) credit card receivables, (iii) auto loans (other than loans for commercial use), (iv) personal loans secured by gold, gold jewellery, immovable property, term deposits (including FCNR(B)), shares and bonds, etc., (other than for business / commercial purposes), (v) personal loans to professionals (excluding loans for business purposes), and (vi) loans given for other consumptions purposes (e.g., social ceremonies, etc.). However, it excludes (a) education loans, (b) loans given for creation / enhancement of immovable assets (e.g., housing, etc.), (c) loans given for investment in financial assets (shares, debentures, etc.), and (d) consumption loans given to farmers under KCC.

(7) Current Account shall have the same meaning as defined in the Reserve Bank of India (Urban Co-operative Banks – Interest Rate on Deposits) Directions, 2025

(8) Customer shall mean a user or a potential user of bank services, and may include: (i) a person or entity that maintains an account and / or has a business relationship with a UCB; (ii) one on whose behalf the account is maintained (i.e., the beneficial owner); (iii) beneficiaries of transactions conducted by professional intermediaries, such as Stockbrokers, Chartered Accountants, Solicitors, etc., as permitted under the law, and (iv) any person or entity connected with a financial transaction which can pose significant reputational or other risks to a UCB, say, a wire transfer or issue of a high value demand draft as a single transaction.

(9) Customer induced transaction means a transaction in an account which is in the nature of: (i) a financial transaction initiated by or done at the behest of the account holder by a UCB / third party or; (ii) a non-financial transaction, or; (iii) KYC updation done in face-to-face physical mode or through digital channels such as internet banking or mobile banking application of a UCB. Note: Illustrative list of financial transactions is as under: (a) ATM / Cash withdrawal / deposit (b) RTGS / NEFT/ IMPS /UPI / AePS / ABPS Transactions (c) Internet Banking Transactions (d) Debit Card Transactions (e) Transfer of funds from / to the linked CBDC(e-Rupee) account (f) Cheque Clearing (g) Remittance of funds by way of demand drafts (h) Cash withdrawal by third party through cheque (i) Standing Instructions issued by the customer (j) NACH Debit / Credits (k) Term Deposit Interest / proceeds (l) Dividend on shares / Interest on Debentures or any other investment proceeds (m) Direct Benefit Transfer (DBT) credits (n) Refunds such as related to e-commerce payments, Income Tax Returns, etc. (o) National Electronic Toll Collection (NETC) debits

(9a) Digital Payment Transaction shall have the same meaning as “Electronic Funds Transfer” defined in section 2(c) of the Payment and Settlement Systems Act, 2007.

(10) Equated Periodic Instalment (EPI) means an equated or fixed amount of repayments, consisting of both the principal and interest components, to be paid by a borrower towards repayment of a loan at periodic intervals for a fixed number of such intervals; and which result in complete amortisation of the loan. EPIs at monthly intervals are called EMIs.

(11) Equivalent e-document shall have the same meaning as defined in the Reserve Bank of India (Urban Co-operative Banks – Know Your Customer) Directions, 2025

(12) Eligible collateral shall have the same meaning as defined in the Reserve Bank of India (Urban Co-operative Banks – Credit Facilities) Directions, 2025

(13) Jewellery shall have the same meaning as defined in the Reserve Bank of India (Urban Co-operative Banks – Credit Facilities) Directions, 2025

(14) Financial transaction means a monetary transaction in the savings / current account of a customer with a UCB either by way of a credit or debit transaction.

(15) Inoperative Account means a savings / current account where there are no ‘customer induced transactions’ in the account for a period of over two years.