Reserve Bank of India (Rural Co-operative Banks - Branch Authorisation) Directions, 2025
UR
- Applies toRural co-operative banks
- StatusIn force
- IssuedNov 28, 2025
- Amendmentsnone tracked
- Length70 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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69 of the 70 points name no product and bind every product. All products.
Numbers to remember
| one percent | The bank's capital ratio must be one percentage point above its minimum. RBI Para 7 |
| 15 per cent | An eligible bank may open branches up to 15 per cent of last year's count. RBI Para 13 |
| three years | A counter running more than three years can be turned into a branch. RBI Para 14 |
| one lakh | A district central bank needs a centre of at least one lakh people. RBI Para 18 |
| 75 per cent | Failing to open 75 per cent of approved branches in time is taken seriously. RBI Para 22 |
| two years | The bank can be barred from opening new branches for the next two years. RBI Para 22 |
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. Branch Authorisation
Must know
1. One test for most permissions
RBI has set one eligibility test that most permissions now hang on.
2. Capital above the floor
The bank's capital ratio must be one percentage point above its minimum.
3. Bad loans under three
Net bad loans must not be more than 3%.
4. Profit for two years
The bank must show net profits in the preceding two financial years.
5. No reserve shortfall
There must be no failure to keep the cash and liquidity reserves.
6. Core banking fully in
Core banking software must be fully in place.
7. Clear with both watchers
The bank must not be under directions or corrective action of RBI or NABARD.
8. Good until September
The eligibility holds until 30th September of the next financial year.
9. A wrong claim costs
A bank found wrongly claiming eligibility can lose self-review for a year.
10. The state decides the area
A district central bank's area of operation is settled by the state government.
11. No objection letter not needed
For that byelaw change the bank needs no no objection letter from RBI.
12. Ask before any new place
Branches, counters, cash machines and back offices all need prior permission.
13. Opening without it is illegal
Opening a place of business without approval breaks the law and draws penalty.
14. Fifteen per cent free
An eligible bank may open branches up to 15 per cent of last year's count.
15. Machines at a branch
Cash machines at a branch or counter need no RBI approval.
16. Machines elsewhere need eligibility
An off-site machine inside the area of operation needs the bank to be eligible.
17. A controller always needs approval
A controlling office always needs RBI's prior approval.
18. A controller does no business
A controlling office must not bring in business of its own.
19. It cannot become a branch
A controlling office cannot be turned into a branch, or a branch into one.
20. An old counter upgrades
A counter running more than three years can be turned into a branch.
21. Spare capital is needed
The bank needs enough headroom capital before it uses the free route.
22. One at least, ten most
That works out to a minimum of one branch and a maximum of 10.
23. Only if old ones cleared
The free route is open only if every existing branch is properly authorised.
24. Where the apex may go
In the state capital, and one branch per district with no district bank branch.
25. The district bank needs people
A district central bank needs a centre of at least one lakh people.
BankPulse example. A district central co-operative bank wants a branch in a town of 60,000 people. The free route is shut to it there, because RBI's census test names a centre of one lakh. So the bank files the yearly plan and waits for RBI's answer instead.
26. Ninety days for an answer
RBI decides on a complete branch application within 90 calendar days.
27. The order cannot be changed
Branches are approved strictly in the order of preference the bank gave.
28. Open three of every four
Failing to open 75 per cent of approved branches in time is taken seriously.
29. Two years shut out
The bank can be barred from opening new branches for the next two years.
30. The apex bank is limited
A state co-operative bank may normally open only in the state capital.
31. At the district headquarters
There the apex bank may open only to hold and serve co-operative bank deposits.
32. Where the district bank fails
The apex bank may step in where the district bank is missing or defunct.
33. The north east is freer
An apex bank of a north-eastern state may open or shift anywhere in its area.
34. Where a counter may go
Inside a college, big office, factory or hospital the bank already banks for.
35. Not in a market
No counter in a marketplace or shopping centre, and one only per premises.
36. Ten kilometres from the branch
The base branch must be within 10 kilometres of the counter.
37. Ten lakh at a counter
A counter may pay out other loans only up to 10.00 lakh.
38. No outside ads on screens
Other people's products must not be advertised on the cash machine screen.
39. Moving inside town is free
A branch or office may move within the same city, town or village freely.
40. Closing needs no approval
Any place except the head office may be closed without RBI approval.
41. Doorstep service needs no approval
The bank may offer doorstep banking on its own, without asking RBI.
42. A thousand crore for agents
Only a bank with deposits above 1000 crore may use agents at the door.
43. Others use own staff
Every other bank may use only its permanent employees.
44. Weak banks must ask first
A bank short of the section 11 capital needs approval to sell or take premises.
45. Sign nothing before approval
It must not commit to premises before RBI has given its approval.
Do it
46. Thirty days after the audit
The bank must put its eligibility check to the board within 30 days.
47. Tell both in fifteen days
RBI and NABARD must both be told within 15 calendar days.
48. The premises must be clean
The lease must be valid and free of any dispute with the landlord.
49. A written branch policy
The board must approve a written policy for opening branches.
50. Open it before March
An approved branch must open by March 31 or the approval lapses.
51. The registrar must recommend
In all those cases the state registrar's recommendation is needed.
52. One month before shifting
Customers get at least one month's notice before a branch moves.
53. Two months before closing
Depositors and clients get two months' notice before a branch shuts.
54. Send back the licence
The original branch licence goes back to RBI within 15 calendar days.
55. Keep the records ready
The papers must be kept and shown to RBI or NABARD when asked.
56. Tell RBI about the scheme
RBI is told of the doorstep scheme within 15 calendar days of starting it.
57. The board reviews it yearly
The board looks at how the doorstep scheme is working once a year.
Chapter III. Reporting
1. Late reporting shuts the door
Late or wrong reporting can bar new branches for up to three years.
2. Seven days to report
Opening, closing, merging or shifting goes on the RBI portal within seven days.
3. Fifteen days for the rest
Anything not needing approval is still reported in 15 calendar days.
4. Write to NABARD, not RBI
Every application goes first to the NABARD regional office.
5. Send RBI a copy early
An advance copy of the application also goes to the RBI regional office.
Chapter IV. Repeal and other Provisions
1. It replaces its own twin
It repeals a rulebook of the same name issued days earlier.
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.
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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