Reserve Bank of India (Rural Co-operative Banks – Undertaking of Financial Services) Directions, 2025 (Updated as on April 27, 2026)
UR
- Applies toRural co-operative banks
- StatusIn force
- RBI text changedRBI updated this document on October 05, 2026. BankPulse is re-reading it. BankPulse checked 37 points against RBI's new text on 18 October 2026. 36 stand. 1 are marked below and are being re-read.
- IssuedNov 28, 2025
- Last amendedJun 15, 2026 · 2 incorporated
- Length37 points in 5 sections · 3 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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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.
Chapter I. Preliminary
1. Other business for RCBs
This document sets what other business the lender may take on.
2. In force at once
The rules took effect the day they were issued. There was no grace period.
3. Who is covered
These Directions apply to every rural co-operative bank.
4. What an RCB means here
A rural co-operative bank means a state or central co-operative bank.
Chapter II. General Guidelines
Do it
1. Complaints policy in place
A Board approved complaints policy with an escalation ladder must already work.
2. Policy must cover funds
The investment policy must carry provisions on investing in such funds.
BankPulse example. A lender that has never invested in such a fund still needs the words in its investment policy. The policy must carry provisions governing its investments in a scheme of that kind. Writing them only when the first investment is proposed is too late.
3. Ten per cent alone
A lender alone cannot put more than ten per cent into an alternative investment fund.
4. Twenty per cent from all
All regulated lenders together cannot hold more than twenty per cent of a fund.
5. Subordinated units deducted
A holding in subordinated units of such a fund is deducted from capital in full.
BankPulse example. A lender puts ₹10 crore into such a fund, as subordinated units. The whole ₹10 crore comes off capital funds. It is taken proportionately from Tier-1 and Tier-2 capital.
6. Some funds are exempt
The Reserve Bank may exempt named funds from these rules by notification.
Chapter III. Financial Services
Do it
1. No forcing an insurer
The lender cannot compel a customer towards one insurance company.
2. Customer picks the insurer
The customer is free to choose his own insurer.
3. Apply for insurance work
Insurance agency work without risk is applied for through the Pravaah portal.
4. Board resolution with it
The application must carry a certified copy of the Board resolution.
5. No insurance without permission
Insurance business cannot be started without the Reserve Bank's prior permission.
6. Insurance regulator too
The permission also requires a licence from the insurance regulator.
7. Cannot take claim money
The permission does not allow the bank to set dues against insurance claim money.
8. Three party agreement needed
Any set off against a claim needs an agreement among insured, insurer and agent.
9. Permission lasts two years
Permission for insurance agency work is valid for two years and is then reviewed.
10. Renew through Pravaah
Renewal of the permission is applied for through the Pravaah portal.
11. Permission can be withdrawn
Breaking any condition at any time can cost the bank its permission.
12. Written agreement needed
A formal agreement with the insurance company is needed for a referral.
13. Three year first agreement
The first referral agreement cannot run beyond three years.
14. Longer contract after first
A longer contract may follow the first period, if the Board approves it.
15. Customer joins by choice
A customer takes an insurance product only by choice, never by requirement.
16. No link to banking
There must be no link, direct or indirect, between banking service and insurance.
17. Risk stays outside
No risk from a referral arrangement may pass to the bank's own business.
18. No approval for referral
Prior approval is not needed to take up referral business.
19. Systems audited in six months
The bank's systems must have passed an information systems audit within six months.
20. Card rules still apply
The payments department's rules on card acquiring and terminals apply as well.
21. Own terminals need approval
Putting out its own card terminals needs an application through Pravaah.
22. Prepaid needs own ATMs
A bank issuing prepaid instruments must have its own ATM network.
23. Prepaid follows payment rules
Prepaid instruments must meet the payments department's eligibility rules.
Chapter IV. Repeal and Other Provisions
1. Old rules stay repealed
Rules repealed before this document was issued remain repealed.
2. Past acts still stand
Anything done under the old rules is still judged by the old rules.
3. Old approvals carry over
Approvals given under the repealed rules are now read under these rules.
4. Added to other law
These rules sit on top of every other law and rule already in force.
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 Apr 27, 2026.
- New product added. Banks must now treat AgriSURE Agri Fund for Start Ups and Rural Enterprises as a permitted financial service.
- Start date. This change takes effect at once from the issue date of these amendment directions.
Changed on Jun 15, 2026.
- Start date. These amendment rules will apply from January 01, 2027.
- Follow conduct directions. Each rural co-operative bank must fully follow the Responsible Business Conduct Directions, 2025.
- Fee based only. Agency or referral business must be fee based only, with no risk sharing by the bank.
- Check insurer grievance setup. Banks must ensure each insurer whose products they sell has strong grievance redress systems.
The same subject for other kinds of institution
The same subject for other kinds of institution.
RBI financial services business rules for all India financial institutions
RBI financial services business rules for regional rural banks
RBI financial services business rules for small finance banks
RBI financial services business rules for urban co-operative banks
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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