Reserve Bank of India (Rural Co-operative Banks - Governance) Directions, 2025 (Updated as on May 25, 2026)
UR
- Applies toRural co-operative banks
- StatusIn force
- IssuedNov 28, 2025
- Last amendedMay 25, 2026 · 1 incorporated
- Length65 points in 5 sections · 6 min read
The four dates on this rule
- PublishedNov 28, 2025The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyNov 28, 2025The day this rule starts to apply, as RBI's own text states it.
- Time to get readyNoneIt starts to apply on the day it was published.
- 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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62 of the 65 points name no product and bind every product. All products.
What it says
How firm is each point
Stated by RBI — RBI’s own paragraph says this. We have only made it plainer.
Our reading — BankPulse read RBI’s paragraph and shortened it. The paragraph is the authority, not this line.
Needs judgement — RBI leaves this to the bank to settle, so nobody can give you a fixed number here.
Can be read two ways
A point marked this way sits on an RBI paragraph that can honestly be read two ways. Our own sentence takes one of the two. BankPulse does not choose for you: read RBI’s own paragraph, at the number printed on the point, before you act on it.
Two ways — firm, or the usual course. RBI’s paragraph softens the duty with a hedging word instead of stating it flat. One reading: It is a firm rule, and only a rare case RBI would accept sits outside it. The other: It is the usual course, and a bank may depart from it for its own recorded reasons.
Chapter I. Preliminary
1. Starts at once
The rules start the moment RBI issues them.
2. Who must follow this
These rules apply to every rural co-operative bank.
3. Which banks those are
State co-operative banks and central co-operative banks, as the NABARD law defines them.
Chapter II. Constitution of Board and Appointment of Chief Executive Officer (CEO) / Managing Director (MD)
Must know
1. Directors must be honest
Directors should be people who know their work and have high integrity.
2. They must work as one
Directors must work together and lead the bank smoothly.
3. Non members cannot join
A person who cannot even be a member cannot be a director.
4. Money lenders cannot be directors
A person in money lending, financing or investment work cannot be a director.
5. Convicted persons cannot join
A person convicted of a crime involving moral turpitude cannot be a director.
6. Ten years on the board
A director may sit for ten years at a stretch.
7. Then three years out
After that he must stay away for three years before coming back.
8. Nobody stays for ever
In the gap years he may stay only as a member or a customer.
9. How ten years count
A break of less than three years does not wipe the earlier time.
BankPulse example. A director joins in 2012 and serves eight years, to 2020. He is off the board for two years and returns in 2022. Two years is less than three, so the first eight still count. He may serve two more years and no longer. Had he stayed away four years, the clock would have started again at zero.
10. Two directors who know banking
The bank must have at least two directors with banking experience.
11. Or the right qualification
Accounts, banking, agriculture and development, law or audit all count.
Background
12. Another bank is allowed
The gap does not stop him joining the board of a different bank.
Chapter III. Role of the Board and Individual Directors
Must know
1. The board makes policy
The board is responsible for making the bank's policies.
2. Board watches, boss runs
The board supervises. Day to day running is left to the chief executive.
3. The bank holds public money
The bank is a trustee and keeper of the public's money.
4. Keep up with technology
Directors should know the latest banking technology and push the bank to use it.
5. Stay out of daily work
Directors must not step into management work or everyday business.
6. No orders to staff
Directors must not send instructions to any officer or employee.
7. Do not push loans
Directors must not approach or influence anyone to sanction a facility.
8. No pushing for a job
Directors must not sponsor anyone for a job, a promotion or a transfer.
9. No favour to that party
A related party must get no preferential treatment of any kind.
10. Keep customer matters secret
A director is under oath of secrecy and must reveal nothing about a customer.
11. Do not call for files
Directors must not call department papers, files or notes for their own scrutiny.
12. No bank logo on cards
Directors must not print the bank's design on visiting cards or letterheads.
Do it
13. Circulars reach every director
Every RBI and NABARD circular on policy must be seen by every director.
14. A written code of conduct
The bank must write a code of conduct for its directors and senior staff.
15. Signed before two bodies
Directors sign the code in witness of the Registrar and NABARD.
16. Attend and take part
Directors should come to board meetings regularly and take part properly.
17. Get the papers early
Directors should get agenda notes in advance and check their quality.
18. Strengthen audit and vigilance
Directors should build up internal audit and vigilance, and follow up on it.
19. Read the inspection reports
Directors should read audit and NABARD inspection reports and act in time.
20. Review the frauds
Directors should review frauds, their reporting and the action taken.
21. Watch the weak branches
Directors should review how branches are doing, loss-making ones above all.
22. Big loans reach the board
Loans sanctioned by the chief executive or general manager must reach the board.
23. Chase the recovery
Directors should build follow up so bad loans and overdues come down.
24. A plan every year
Directors should see a development action plan made and checked each quarter.
25. Leave that discussion alone
A director must not join a board talk on a proposal he has interest in.
26. Speak about your interest
He must tell the chief executive and the board well in advance.
27. If a relative deal happens
The director must disclose the whole nature of it to the proper authority.
28. Board papers go back
Board papers should normally be returned to the bank after the meeting.
Background
29. Who counts as senior staff
General managers and heads of function count as senior management.
Chapter IV. Board Meeting Procedures
1. A return each quarter
The bank sends a return to its NABARD regional office every quarter.
2. Due by the tenth
It is due by the 10th of April, July, October and January.
Chapter V. Committees of the Board
Must know
1. Audit committee for all
Every one of these banks must set up an audit committee at board level.
2. Three or four directors only
The audit committee is three or four directors, one of them its chairman.
3. Chairman and boss stay out
The bank's chairman and its chief executive cannot sit on the audit committee.
4. It can ask anyone anything
The audit committee gets direct and open access to management and both audits.
5. Risk committee for all
Every one of these banks must form a risk committee under its board.
6. Who sits on it
The chief executive and the heads of credit, investment and operational risk.
7. The technology head is invited
The head of the IT department attends as a special invitee.
Do it
8. An accountant is brought in
One qualified chartered accountant from the area must be co-opted.
9. The audit committee meets quarterly
The audit committee must meet at least once in every quarter.
10. It meets the auditors alone
Twice a year it meets management and the auditors in separate private sittings.
11. A loan review system
The risk committee must see a loan review system that keeps checking loan quality.
12. A cash policy that works
It must see a liquidity policy with funding plans, other scenarios and limits.
13. Split the duties
It must set up controls that split duties and fix clear reporting lines.
Background
14. The main risks are named
Credit, liquidity, interest rate, market, foreign exchange and solvency risk.
Chapter VI. Repeal and other provisions
1. Old rules stand repealed
All earlier governance rules for these banks are repealed.
2. Old actions still stand
Anything done under the old rules stays governed by those old rules.
3. Old approvals still count
Approvals given under the repealed rules now come under these rules.
4. Other laws still apply
These rules add to other laws. They do not cut them down.
5. RBI's reading is final
If a rule is unclear, RBI's reading of it binds everyone.
How this rule has changed
The points above are the rule as it stands today, after every change listed here.
Issued on Nov 28, 2025. This is the date RBI put the rule out.
Changed on May 25, 2026.
- Start date. These new amendment rules apply from the date the circular is issued.
- No other role then. In the three year cooling period, the person can only be a member or customer of that rural co-operative bank.
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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