Home › Circulars › RBI/2007-08/286

RBI Expands Professional Director Norms for Urban Co-op Banks

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2007-08/286 · issued 21 Apr 2008 · ~1 min read
Quick answerRBI has broadened the definition of 'professional directors' for UCBs to include persons with qualifications in law, accountancy, or finance, beyond just banking experience or CA with audit background. UCBs must now have at least two such directors on their boards at all times.

What changed

Earlier, UCBs were required to have at least two directors with banking experience or Chartered Accountants having bank accounting/auditing experience. Now, the scope has been enlarged to include professionals qualified in law, accountancy, or finance as eligible 'professional directors'.

What it means for you

UCBs will find it easier to comply with the board composition requirement as the pool of eligible professionals has widened. This move aims to strengthen governance by bringing diverse expertise onto boards, but banks must amend their bye-laws to reflect the new definition and ensure continuous compliance.

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

Primary (Urban) Co-operative Banks (UCBs), Board of Directors of UCBs, Compliance and governance teams 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 qualifications now count as 'professional director' under this circular?

Professional directors can be persons with suitable banking experience at middle/senior management level, or those with professional qualifications in law, accountancy, or finance.

Do we need to amend our bye-laws immediately?

Yes, the circular advises UCBs to initiate steps to amend bye-laws to incorporate the new provision and ensure compliance with the requirement of having at least two professional directors at all times.

📜 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Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)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 #2268: UBD.PCB.Cir.No.41/09.103.01/2007-08 — "Professionalisation of Managements of Urban Co-operative Banks" dated April 21, 2008”
📜 Read the original circular — full text as issued by RBI
RBI/2007-08/286 UBD.PCB.Cir.No.41 /09.103.01/2007-08 April 21, 2008 The Chief Executive Officers of all Primary (Urban) Co-operative Banks Dear Sir /Madam, Professionalisation of Managements of Urban Co-operative Banks Please refer to our circular UBD No PCB CIR.POT.39/09.103.01/2001-02 dated April 5, 2002 on the captioned subject. 2.  In terms of paragraphs 2 and 3 of the aforesaid circular, all urban co-operative banks were advised to amend their bye-laws to incorporate a suitable provision therein to ensure that there should  at all times  be at least two directors with suitable banking experience (at middle / senior management level) or with relevant professional qualifications i.e., Chartered Accountants with bank accounting / auditing experience. 3.  Since the scope of professional directors prescribed in the aforesaid circular was confined to persons with suitable banking experience or Chartered Accountants with bank accounting / auditing experience, several UCBs have expressed difficulties in having two professional directors on their Board. The matter has been reviewed and it has been decided to enlarge the ambit of 'professional directors' to include persons with professional qualification in the fields of law, accountancy or finance. 4.  Accordingly, UCBs may, at all times, have at least two professional directors, i. e. persons with suitable banking experience (at middle / senior management level) or with professional qualification in the fields of law, accountancy or finance. You may initiate steps to amend the bye-laws of your bank accordingly and ensure compliance with the above requirement. 5.  Please acknowledge receipt to the concerned Regional Office of Reserve Bank of India. Yours faithfully, (A.K.Khound) Chief General Manager in Charge.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2007-08/286 · issued 21 Apr 2008. The plain-English explanation above is BankPulse’s own independent summary.
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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=4133&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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