What changed
RBI consolidated and updated multiple existing instructions into a single 'Reserve Bank of India (Regional Rural Banks – Miscellaneous) Directions, 2025'. The directions now explicitly require RRBs to have board-approved policies on staff training, certifications, sensitive positions for mandatory leave, and business continuity plans. The document also formalizes procedures for the Depositor Education and Awareness Fund, KYC updation camps, FATCA registration, and prohibitions on accepting deposits from private financiers or associating with prize chit schemes.
What it means for you
RRBs must now ensure their boards formally approve and periodically review policies on training, certifications, mandatory leave for sensitive roles, and business continuity. The directions tighten compliance around depositor fund transfers, KYC updates, and FATCA obligations, while reinforcing bans on risky deposit arrangements and lottery-linked schemes. Sponsor banks are also brought under specific provisions, increasing oversight. Non-compliance could attract regulatory action under the Banking Regulation Act.
What you must do
- Review and update board-approved policies for staff training, certifications, sensitive positions for mandatory leave, and business continuity planning as per the new directions.
- Ensure compliance with Depositor Education and Awareness Fund rules, including timely credit of unclaimed deposits and proper record-keeping.
- Conduct periodic KYC updation camps and campaigns as required under Chapter IV.
- Verify FATCA registration and reporting processes for compliance with Inter-Governmental Agreement with the US.
- Reinforce prohibitions on accepting deposits from private financiers/unincorporated bodies and on associating with prize chit schemes or lottery sales.
Who it affects
Regional Rural Banks (RRBs), Sponsor banks of RRBs, Board of Directors of RRBs, Compliance and risk management teams at RRBs, Deposit operations and KYC teams
When do these directions take effect?
The directions come into force with immediate effect from the date of issuance, November 28, 2025.
Do these directions apply to sponsor banks as well?
Yes, sponsor banks are governed by paragraph 46 of the directions, which outlines their specific obligations.