Reserve Bank of India (Urban Co-operative Banks - Miscellaneous) Supervisory Directions, 2026
UR
- Applies toUrban co-operative banks
- StatusIn force
- IssuedJul 31, 2026
- Amendmentsnone tracked
- Length52 points in 5 sections · 5 min read
The four dates on this rule
- PublishedJul 31, 2026The day RBI put this document out. This is the same day as the Issued date on this rule.
- Starts to applyJul 31, 2026The 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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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 — both, or either one. RBI’s paragraph joins two things in the and-or form. One reading: Both of them apply, together. The other: Either one of them, on its own, is enough.
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.
Opening paragraphs
1. One supervisory rulebook
This book holds RBI's mixed supervisory rules for urban co-operative banks in one place.
Chapter I. Preliminary
1. Start date
These rules took effect the day RBI issued them.
BankPulse example. There is no gap here between issue and effect. The Directions come into effect immediately upon issuance. A bank cannot wait for a separate start date, because there is none.
2. Who is covered
These rules apply to every urban co-operative bank.
3. Words from the Acts
Any other word takes its meaning from the RBI Act, the Banking Regulation Act or the Companies Act.
Chapter II. Core Banking Solution Implementation
1. Core banking everywhere
The bank must run Core Banking Solution in all its branches. It must tell RBI's Senior Supervisory Manager how that is going.
Chapter III. Prompt Corrective Action Framework
1. Why early action exists
The Prompt Corrective Action framework lets RBI step in early and makes a weak bank start fixing itself.
2. Three things watched
Capital, asset quality and profitability are the three areas the framework tracks.
3. What puts a bank in
A bank goes under the framework on its audited yearly results or on RBI's own running assessment.
4. What takes it out
Coming out of the framework is considered when the breaches stop.
5. Actions RBI may order
Once inside, one or more corrective actions may be ordered, some of them compulsory.
Chapter IV. Fair Practices Code - Charging of Interest
1. Check how you charge
The bank must review how it pays out loans and charges interest, and fix what is unfair.
2. RBI calls this serious
Odd ways of charging interest are not fair or open, and RBI treats them as a serious matter.
3. Pay out by transfer
The bank may pay out a loan by online transfer instead of a cheque.
Chapter V. Nomination Facility
1. Report every quarter
Progress on nomination cover goes to RBI through the DAKSH portal every quarter.
2. The board reviews cover
The board or its Customer Service Committee must review how far nomination cover has reached.
3. Train the front desk
Branch staff must be trained to take nominations and to handle the claims of a dead customer's family.
4. Tell the public
The bank must publicise the use of nomination through the media as well as telling customers directly.
Chapter VI. Fraud Prevention Measures
Must know
1. No talking at the till
Staff handling cash must not take enquiries or chat while on that duty.
2. No big branch balances
No branch may hold an unduly large cash balance. Cash in the safe, at counters and in transit must be fully insured.
3. Fifty thousand by account
A draft, pay order or traveller's cheque above ₹50,000 must go through the customer's account, not cash.
BankPulse example. A demand draft above ₹50,000 must be paid for from the customer's account, not in cash. So a draft of ₹75,000 cannot be paid for with notes across the counter. A draft of ₹40,000 may still be paid for in cash.
4. No block adjustments
Old unmatched entries between branches must not be written off in a block to clear arrears.
Do it
5. Join up the departments
Internal audit, the personnel department and the discipline cell must work closely together.
6. Run both enquiries
A departmental enquiry into banking lapses must run alongside any CBI case, with the charges kept apart.
7. Check every recruit
The background of every person appointed must be checked, whatever the grade.
8. Rotate the duties
Staff duties must be rotated at set intervals, and the vigilance department must get a certificate saying so.
9. Desk cards for staff
Every employee must know the safeguards for his own work, set out on desk cards for each job.
10. Write down the powers
The bank must set out the money and office powers of each official, and define what counts as abuse.
11. Only cash staff inside
Only cash handling staff may enter the cash cabin, and vault guarding must be foolproof.
12. Teach signature checking
Checking signatures and handwriting must be part of the staff training course.
13. Balance the books quickly
The bank must speed up balancing its books and matching entries between branches.
14. Quotes for furniture
For furniture, fixtures and stationery the bank must take quotations from as many suppliers as it can.
15. Rotate, but keep the skill
Duties across computerised offices must rotate without wasting the skills already learnt.
16. Keep a manuals library
The head office must hold a library of authenticated manuals for its system and application software.
17. Back up and store away
Files must be backed up at set intervals and the copies kept at a nearby office.
18. Computerise the risky ledgers
Suspense accounts, service branches, Nostro matching and drafts payable should all be computerised.
19. Snap checks every quarter
Senior officers must make surprise inspections of branches every quarter.
20. Tell the other bank
If an employee of another bank opens an account here, that bank must be told.
21. Staff must declare accounts
A staff member must say in writing about accounts opened by himself and his dependants.
Background
22. A field vigilance cell
The head office vigilance cell needs its own officers to investigate complaints and meet complainants.
23. Cash only at the counter
Cash may be taken or paid only in the cash department. No counterfoil goes out unless a second officer has signed it.
24. Guard the risky branches
Larger branches and those in areas prone to robbery need their own arrangements for guarding cash.
25. Vouchers on written request
Vouchers may be released only on the manager's written request, with the time and date recorded.
26. Board approves premises deals
Every premises transaction needs the approval of the board or its management committee.
27. Keep records of big deals
Large contracts need separate records showing the details and what was weighed in awarding them.
28. Two people per system
Every computer installation needs at least two trained people in charge of it.
29. Guard the sensitive settings
Limits, drawing power, interest rates, charges and forex rates need a set procedure for who may change them.
30. Insure the data too
The bank may take insurance against the cost of replacing data, software and equipment.
Chapter VII. Vigilance
1. Prevent, not only punish
The bank must add preventive vigilance measures to the usual detective and punitive ones.
Chapter VIII. Repeal and Other Provisions
1. Old instructions repealed
The old rules on these matters were repealed by RBI's own circular.
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 action stands
What was done or begun under the old rules is still ruled by them.
BankPulse example. A show cause notice was issued under the old rules last year. The repeal does not move it. Any action taken or initiated under the repealed directions is still governed by them. The new rulebook applies to what comes after.
3. Adds to other law
These rules add to other laws in force. They take nothing away.
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.
4. RBI's reading is final
RBI may clear up doubts, and its reading of any clause is final.
The same subject for other kinds of institution
The same subject for other kinds of institution.
RBI miscellaneous supervisory rules for all India financial institutions
RBI miscellaneous supervisory rules for credit information companies
RBI miscellaneous supervisory rules for regional rural banks
RBI miscellaneous supervisory rules for rural co-operative banks
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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