Reserve Bank of India (Urban Co-operative Banks – Licensing, Scheduling and Regulatory Classification) Guidelines, 2025
UR
- Applies toUrban co-operative banks
- StatusIn force
- IssuedNov 28, 2025
- Amendmentsnone tracked
- Length12 points in 4 sections · 2 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 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.
This rulebook is short, and the page is short with it. The whole guideline is about 950 words across six paragraphs; these points cover every operative rule in it.
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Numbers to remember
| ₹100 crore | Tier 1 holds all unit and salary earners' banks, plus others with deposits up to ₹100 crore. RBI Para 2 |
| ₹1000 crore | Tier 2 runs from ₹100 crore to ₹1000 crore; Tier 3 from there to ₹10,000 crore. RBI Para 2 |
| ₹10,000 crore | Tier 4 holds banks with deposits above ₹10,000 crore. RBI Para 2 |
| two years | A bank moving up a tier gets up to two years to meet the higher tier's rules. RBI Para 4 |
| three per cent | That door also needs capital at least three per cent above the bank's minimum requirement. RBI Para 5 |
| three years | The application carries a board resolution and the last three years' published balance sheets. RBI Para 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.
Must know
1. No conversions either
Co-operative credit societies cannot convert into urban co-operative banks now.
2. Tier 1, the smallest
Tier 1 holds all unit and salary earners' banks, plus others with deposits up to ₹100 crore.
3. Tiers 2 and 3
Tier 2 runs from ₹100 crore to ₹1000 crore; Tier 3 from there to ₹10,000 crore.
BankPulse example. An urban co-operative bank holds deposits of 600 crore rupees. That is more than 100 crore and up to 1000 crore, so it is Tier 2. A bank holding 4,000 crore of deposits is Tier 3.
4. Tier 4, the largest
Tier 4 holds banks with deposits above ₹10,000 crore.
5. Two years to adjust
A bank moving up a tier gets up to two years to meet the higher tier's rules.
6. Extra capital demanded
That door also needs capital at least three per cent above the bank's minimum requirement.
7. Papers with the application
The application carries a board resolution and the last three years' published balance sheets.
Background
1. No new bank licences
RBI is not considering any fresh proposal for a new urban co-operative bank.
2. Which banks these are
Urban co-operative banks means primary co-operative banks under section 5(ccv) read with section 56 of the law.
3. Four size tiers
Every bank sits in one of four tiers, set by its deposit size.
4. March books decide
The tier is set by deposits in the audited balance sheet of the previous 31st March.
5. The scheduled bank door
A bank holding Tier 3 size deposits for two straight years may apply to become a scheduled bank.
Other RBI rules for urban co-operative banks
RBI capital adequacy rules for urban co-operative banks 2025
RBI compliance officer and compliance function rules for urban co-operative banks
RBI concurrent audit rules for urban co-operative banks 2026
RBI credit bureau reporting rules for urban co-operative banks 2025
RBI credit card and debit card rules for urban co-operative banks 2025
RBI customer service and fair conduct rules for urban co-operative banks 2025
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