What changed
RBI issued the Reserve Bank of India (Urban Co-operative Banks – Credit Risk Management) Directions, 2025, effective immediately from November 28, 2025. These directions consolidate and update previous guidelines on credit risk management for UCBs, covering board-approved policies, statutory and regulatory restrictions, credit administration, LEI for borrowers, property valuation, CERSAI filings, and loan system delivery.
What it means for you
UCBs must now comply with a unified set of credit risk management rules, replacing earlier fragmented guidelines. The directions emphasize stronger board oversight, stricter credit administration, and enhanced transparency through LEI and CERSAI filings. Banks need to review and align their internal policies and procedures with these consolidated requirements to avoid regulatory non-compliance.
What you must do
- Review and update board-approved credit risk management policies to align with the new directions.
- Ensure compliance with statutory and regulatory restrictions on credit exposures and activities.
- Implement or strengthen LEI requirements for borrowers as per Chapter VI.
- Update property valuation processes and empanelment of valuers as per Chapter VII.
- Ensure timely filing of security interests in CERSAI for immovable, movable, and intangible assets.
Who it affects
Urban Co-operative Banks (UCBs), Board of Directors of UCBs, Credit risk management teams at UCBs, Borrowers of UCBs (especially for LEI and CERSAI compliance)
When do these directions take effect?
The directions came into effect immediately upon issuance on November 28, 2025.
Do these directions replace all previous credit risk guidelines for UCBs?
Yes, these directions consolidate and update previous guidelines on credit risk management for UCBs, repealing earlier circulars as per Chapter X.
What is the key focus of Chapter VI on LEI?
Chapter VI mandates Legal Entity Identifier (LEI) for borrowers, requiring UCBs to obtain LEI for eligible borrowers to enhance transparency in credit exposures.