Reserve Bank of India (Local Area Banks – Miscellaneous) Directions, 2025 (Updated as on April 27, 2026)
UR
- Applies toLocal area banks
- StatusIn force
- RBI text changedRBI updated this document on October 05, 2026. BankPulse is re-reading it.
- IssuedNov 28, 2025
- Amendmentsnone tracked
- Length34 points in 5 sections · 4 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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33 of the 34 points name no product and bind every product. All products.
Numbers to remember
| ten years | Money left untouched for ten years or more goes to the RBI Fund. RBI Para 9(5) |
| 3 percent | Since 11 May 2021, banks pay 3 percent interest on such deposits. RBI Para 15 |
| five working days | Banks send unclaimed money to the Fund in the last five working days of a month. RBI Para 19 |
| 10 working days | Banks file refund claims in the first 10 working days of each month. RBI Para 20 |
| five years | After a refund, the bank keeps those papers for at least five years. RBI Para 28 |
| one percent | A bank may give away up to one percent of last year's published profit. RBI Para 48(1) |
| ₹50,000 | An income tax officer may seek details of deposits of ₹50,000 or more. RBI Para 56(6) |
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.
Opening paragraphs
1. One combined rulebook
This book holds RBI's mixed rules for local area banks in one place.
Chapter I. Preliminary
1. Start date
The rules took effect at once, from 28 November 2025.
2. Who is covered
These rules apply to every local area bank.
Chapter II. Role of the Board
1. Board-approved policies
The board must approve policies on donations, staff certificates and sensitive posts.
Chapter III. Depositor Education and Awareness Fund
Must know
1. Ten-year unclaimed rule
Money left untouched for ten years or more goes to the RBI Fund.
2. Interest on Fund deposits
Since 11 May 2021, banks pay 3 percent interest on such deposits.
3. Monthly Fund transfer
Banks send unclaimed money to the Fund in the last five working days of a month.
4. Refund claim window
Banks file refund claims in the first 10 working days of each month.
5. Report errors at once
A bank tells RBI of any error at once. It gives the reason and the checks it has added. It also assures RBI that the error will not happen again.
6. Post-refund record keeping
After a refund, the bank keeps those papers for at least five years.
Do it
7. Auditor certificate deadline
The statutory auditor's yearly certificate must reach RBI by 30 September.
8. Answer RBI on demand
RBI or the Committee may ask. The bank must then pay what is due. It must also give any information they seek on unclaimed amounts.
Background
9. Fund pays for awareness
Money spent on depositor education, awareness and interests is charged to the Fund.
10. Pay the depositor first
If a depositor asks for the money, the bank repays him and then lodges a refund claim with the Fund.
11. Fund account operators
A bank may name up to 10 officers to operate its Fund account.
12. Maker-checker rule
Every Fund deposit and claim entry needs a maker and a checker.
13. Returns go in original
The specified auditors certify the returns. The bank sends the original to the Fund at RBI's Central Office. It sends a copy by email as well.
14. Reconciliation certificate dates
The reconciliation certificate is due by 30 April and 31 October.
15. Audited before and after
Every Fund entry is audited before and after submission and signed by both authorised signatories and the auditors.
16. The Scheme decides
For anything else the bank follows the Scheme notified in the Official Gazette, and RBI's reading of it is final.
Chapter V. Services and Market Operations
1. Hold KYC camps
Banks are advised to run camps and campaigns for periodic KYC updation, especially at rural and semi-urban branches.
Chapter VI. Regulatory Compliance and Legal Matters
1. Do not quote that circular
The RBI circular of 6 April 2018 was set aside by the Supreme Court and must not be cited or quoted.
2. Blocked defaulter companies
No money transaction is allowed for the companies a High Court declared defaulters.
Chapter VII. Financial Conduct and Prohibited Activities
1. Donation limit
A bank may give away up to one percent of last year's published profit.
2. No lottery ties
A bank must not tie itself to any lottery scheme.
3. Prize chit checks
Banks must check that a firm is not running a banned prize chit.
4. Yearly donation review
The bank puts a yearly review of its donations before the board.
Chapter VIII. Taxation and Accounting Related Matters
1. Tax officer requests
An income tax officer may seek details of deposits of ₹50,000 or more.
BankPulse example. An income tax officer may ask about deposits of ₹50,000 or above, and must record the reasons first. So a fixed deposit of ₹80,000 can be asked about. One of ₹20,000 cannot.
Chapter IX. Human Resource and Capacity Building
1. Course certificate rule
Staff must earn a course certificate before they take up listed key roles.
Chapter X. Operational and Administrative Matters
1. Mandatory leave rule
Staff in sensitive posts must take at least 10 working days leave each year.
2. No work while on leave
An employee on mandatory leave may not reach any work resource, apart from ordinary corporate email.
Chapter XI. Repeal Provisions
1. Old instructions repealed
The earlier directions and guidelines on these subjects stand repealed by the circular of 28 November 2025.
BankPulse example. A compliance officer keeps an old circular on the same subject in the manual. It no longer applies. The existing directions, instructions and guidelines on these areas stand repealed. Only this rulebook governs them now.
2. Earlier repeals stand
Rules already repealed before this book stay repealed.
3. Adds to other law
These rules add to other laws, rules and directions in force; they do not take anything away from them.
BankPulse example. A bank follows these Directions and thinks the matter is closed. It is not. Any other laws, rules, regulations or directions in force still apply on top. Where another one asks for more, the bank does the more.
The same subject for other kinds of institution
The same subject for other kinds of institution.
Other RBI rules for local area banks
RBI compliance officer and compliance function rules for local area banks 2026
RBI customer service and fair conduct rules for local area banks 2025
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