Reserve Bank of India (Rural Co-operative Banks – Managing Risks in Outsourcing) Directions, 2025
UR
- Applies toRural co-operative banks
- StatusIn force
- ImportanceMUST READ
- IssuedNovember 28, 2025
- Amendmentsnone tracked
- Length42 points in 5 sections · 4 min read
The four dates on this rule
- PublishedNovember 28, 2025The day RBI put this document out.
- Starts to applyNot statedNot stated separately in this document. Read the rule itself before you assume a start date.
- Time to get readyNot statedCannot be worked out until the day it starts to apply is known.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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What it says
Chapter I. Preliminary
1. Outsourcing rules for RCBs
This document sets the outsourcing rules for rural co-operative banks.
2. Start date
These Directions came into effect on the day the Reserve Bank issued them.
3. Who is covered
These Directions apply to every rural co-operative bank.
4. Services excluded
Courier, catering, housekeeping, security, and the moving and storing of records are not covered.
Chapter II. Role of the Board
1. Responsibility stays with RCB
An RCB cannot outsource its duty. The RCB and its Board stay fully responsible for every outsourced task.
2. Board review cycle
The Board must review all major outsourcing deals every six months.
Chapter III. Outsourcing of Financial Services
Must know
1. Director-owned vendors barred
A service provider cannot be owned or controlled by the bank's own director, officer or their relatives.
2. Contract risk named
There is a risk that the deal with the provider cannot be enforced.
3. No mixing of records
Where a provider serves many firms, records must not be mixed.
4. Answer within thirty days
A complaint must be answered within 30 days at the most, and the procedure must sit on the website.
Do it
5. Control stays at home
The lender must keep full control of the work it gives out.
6. Nine risks to weigh
Nine named risks must be weighed before work is given out.
7. Guard the customer data
Customer data held by the provider must be kept safe.
8. Watch their security
The lender must check the provider's safety steps often, and note any breach.
BankPulse example. A bank hires an outside firm to host its records. Signing the contract is not the end of it. The bank must review and monitor that provider's security practices and control processes on a regular basis.
9. Keep our records separable
The provider must be able to pick out our records and assets.
10. Due diligence each renewal
The provider must be checked when hired and again at each renewal.
BankPulse example. A bank's outsourcing arrangement comes up for renewal after three years. Due diligence is done again, not only when it was first signed. The question each time is whether the service provider can still meet the obligations.
11. Look outside as well
Outside reviews and market feedback should back up our own checks.
BankPulse example. A bank's own checks on a provider are not the whole picture. It also obtains independent reviews and market feedback on that service provider. Those supplement the findings of its own due diligence.
12. Systems must fit
The provider's systems must work with ours, and their service must be good enough.
13. Lawyer must vet it
A lawyer must check the written deal and say it will hold.
14. Agreement must handle risk
The deal must name the risks and say how they will be held down.
15. Room to step in
The deal must leave room to step in to meet the law.
16. Say what the relationship is
The deal must say whether the tie is agent and principal, or not.
17. A structure to watch it
There must be a team in place to watch and steer the work given out.
18. A yearly financial review
The provider's money and work health must be checked at least once a year.
19. Report any slippage
The review must bring out any drop in service, secrecy or safety.
20. Reconcile in time
Deals with the provider and its helpers must be matched up on time.
21. Continuity must be tested
The provider must write down, keep and test its plans to keep work going.
22. Test it together
The provider must test the plan from time to time, and joint drills may be held.
23. Have a way back
The backup plan must look at another provider, or taking the work back.
24. Watch the host country
Where a provider is abroad, its country's rule and politics must be watched.
25. Tell the customer
Where a customer must deal with a provider, the leaflet must say so.
26. Grievances without delay
The named officer must see that real customer complaints are put right fast.
Background
27. Hiring former employees
Former employees can be hired only if the Audit Committee confirms no in-house expertise exists.
28. Duties do not move out
Giving work out does not cut what the lender owes its customers or RBI.
29. Compliance risk named
There is a risk that giving work out breaks privacy or other law.
30. Need to know only
A provider's staff may see customer data only where the job needs it.
31. Half-yearly record review
Outsourcing records go for half-yearly review by the Board too.
32. Only confidential jurisdictions
Work may go abroad only to a country that upholds secrecy terms.
33. The stricter rule wins
Where these rules and the host country's differ, the stricter one wins.
34. Complaint responsibility
The bank alone is responsible for fixing complaints about outsourced services.
Chapter IV. Repeal and Other Provisions
1. Older rules cancelled
This document cancels all older outsourcing rules for commercial banks.
2. Old cases continue
Action already taken under the old rules stays governed by them.
The same subject for other kinds of institution
The same subject for other kinds of institution.
Other RBI rules for rural co-operative banks
RBI Kisan Credit Card rules for rural co-operative banks 2026
RBI capital adequacy rules for rural co-operative banks 2025
RBI credit bureau reporting rules for rural co-operative banks 2025
RBI customer service and fair conduct rules for rural co-operative banks 2025
RBI deposit interest rate rules for rural co-operative banks 2025
RBI digital banking channel rules for rural co-operative banks 2025
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