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RBI exempts Salary Earners UCBs from professional director rule

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2007-08/140 · issued 18 Sep 2007 · ~1 min read
Quick answerRBI has withdrawn the requirement for Salary Earners Primary (Urban) Co-operative Banks to have at least two professional directors on their boards, given their unique membership profile. This relaxes a 2002 mandate for such banks.

What changed

Earlier, all UCBs were required to ensure at least two directors with banking experience or professional qualifications on their boards. Now, Salary Earners Banks are exempt from this requirement, as RBI reviewed the rule considering their membership nature.

What it means for you

Salary Earners UCBs no longer need to recruit or maintain two professional directors, reducing compliance burden and board restructuring costs. This recognizes that their member-depositor base may not necessitate such expertise, but banks must still ensure sound governance.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

Salary Earners Primary (Urban) Co-operative Banks, Boards of Directors of Salary Earners UCBs, Compliance officers of UCBs

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What exactly is a Salary Earners Bank?

The circular does not define the term, but it refers to UCBs whose membership is primarily composed of salary earners, as classified by RBI.

Does this mean Salary Earners UCBs can have zero professional directors?

Yes, RBI has decided not to insist on induction of two professional directors for these banks, so they are not required to have any.

Is this exemption permanent?

The circular does not specify a time limit, but RBI may review policies in the future. Banks should stay updated on any changes.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2340: UBD.PCB.Cir.No.16/09.103.01/2007-08 — "Professionalisation of Managements of Urban Co-operative Banks" dated September 18, 2007”
📜 Read the original circular — full text as issued by RBI
RBI/2007-08/140 UBD.PCB.Cir.No.16 /09.103.01/2007-08 September 18, 2007 The Chief Executive Officers of all Salary Earners Primary (Urban) Co-operative Banks Dear Sir /Madam, Professionalisation of Managements of Urban Co-operative Banks Please refer to paragraphs 2 and 3 of our circular UBD No PCB CIR.POT.39/09.103.01/2001-02 dated April 5, 2002 on the captioned subject requiring UCBs to ensure at all times, the presence of at least two directors with suitable banking experience or with relevant professional qualifications on their Boards. 2. These instructions have been reviewed and keeping in view the nature of their membership, it has been decided not to insist upon induction of two professional directors into the Boards of Salary Earners Banks. Yours faithfully, (N.S.Vishwanathan) Chief General Manger in-Charge
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-08/140 · issued 18 Sep 2007. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3819&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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