What changed
RBI formalised the 'Reserve Bank of India (Rural Co-operative Banks – Digital Banking Channels Authorisation) Directions, 2025', effective January 1, 2026. These directions replace earlier ad-hoc approvals and set clear eligibility criteria: view-only banking requires CBS and IPv6 compliance, while transactional banking needs explicit RBI authorisation. The directions also mandate comprehensive policies covering statutory, regulatory, liquidity, and operational risk requirements for all digital channels.
What it means for you
Rural Co-operative Banks now have a clear regulatory pathway to offer digital banking, but with strict prerequisites. Banks without CBS or IPv6 readiness cannot even offer view-only services. Transactional digital banking (funds transfer, loans) requires prior RBI approval, raising the bar for smaller co-ops. This will accelerate digital adoption but also increase compliance costs and IT investment needs for StCBs and CCBs.
What you must do
- Assess your bank's CBS implementation and IPv6 readiness immediately; if not compliant, plan upgrades before Jan 1, 2026.
- Draft comprehensive policies for all digital banking channels covering liquidity, operational risk, and regulatory compliance as per Chapter II.
- If you plan to offer transactional digital banking, prepare and submit an authorisation application to RBI well in advance.
- Review your current digital offerings to ensure they align with the new definitions (view-only vs transactional) and restrictions.
- Train compliance and IT teams on the new directions, especially the prohibition on transactional features under view-only facility.
Who it affects
State Co-operative Banks (StCBs), Central Co-operative Banks (CCBs), Rural Co-operative Banks planning digital banking, IT vendors and CBS providers for co-operative banks
What is the effective date of these directions?
The directions come into effect from January 1, 2026.
Can a Rural Co-operative Bank offer transactional digital banking without RBI approval?
No. Transactional banking facility (involving funds movement or loans) requires separate RBI authorisation under these directions. View-only facility is allowed if the bank has CBS and IPv6-ready infrastructure.
What is 'view only banking facility' as per these directions?
It allows services that do not alter customer's asset or liability, such as balance enquiry, account statement download, etc. Banks cannot provide loans, funds transfers, or any facility that creates liability or involves fund movement under view-only facility.