Regulating Co-operative Banking

The Reserve Bank had undertaken a review of the extant guidelines on the prudential norms on declaration of dividend and remittance of profits by foreign banks operating in branch mode in India. Accordingly, a draft of the revised framework was issued for public comments on January 2, 2024. However, based on the stakeholder feedback and consultations, the following draft Directions proposing a new methodology for computing the maximum eligible dividend payout are being issued for public comments:

The Reserve Bank of India had issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to The Shirpur Merchants’ Co-operative Bank Ltd., Shirpur, Maharashtra, vide Directive No. CO.DOS.SED. No. S175/45-11-001/2024-2025 dated April 05, 2024, for a period of six months up to the close of business on October 08, 2024, as modified from time to time, which were last extended up to the close of business on January 08, 2026, vide Directive DOR.MON.D-32/12-21-364/2025-26 dated October 06, 2025.

The Reserve Bank of India had, on October 03, 2025, issued eight draft Directions on Lending to Related Parties, viz.,: (i) Reserve Bank of India (Commercial Banks – Lending to Related Parties) Directions, 2025 (ii) Reserve Bank of India (Small Finance Banks – Lending to Related Parties) Directions, 2025 (iii) Reserve Bank of India (Regional Rural Banks – Lending to Related Parties) Directions, 2025 (iv) Reserve Bank of India (Local Area Banks – Lending to Related Parties) Directions, 2025 (v) Reserve Bank of India (Urban Co-operative Banks – Lending to Related Parties) Directions, 2025 (vi) Reserve Bank of India (Rural Co-operative Banks – Lending to Related Parties) Directions, 2025 (vii) Reserve Bank of India (Non-Banking Financial Companies – Lending to Related Parties) Directions, 2025 and (viii) Reserve Bank of India (All India Financial Institutions – Lending to Related Parties) Directions, 2025 seeking feedback from stakeholders. The draft directions were aimed primarily at providing a harmonised, principle-based framework to be adopted by REs while lending to related parties, suitably rationalising the existing provisions.

The Reserve Bank of India issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to The Industrial Co-operative Bank Ltd., Guwahati vide Directive No.GWH.DOS.ADM.No.S103/01-10-101/2025-26 dated July 03, 2025 for a period of six months up to close of business on January 04, 2026. The Reserve Bank of India is satisfied that in the public interest, it is necessary to further extend the period of operation of the Directive beyond close of business on January 04, 2026.

A) Analysis of the performance under the Citizen’s Charter during the month of December 2025 has been carried out, and the summary thereof is given below – Description No. of Applications A Applications pending at the beginning of the month 3,217 B Applications received during the month 24,544 C Referred back to applicants for additional information 388

The Reserve Bank of India issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to Innovative Co-operative Urban Bank Limited, Delhi vide Directive No. DEL.DOS.EXG_SSM.No.S143/12-10-005/2025-2026 dated July 03, 2025 for a period of 06 months up to close of business on January 04, 2026

The Reserve Bank of India issued Directions under Section 35A read with Section 56 of the Banking Regulation Act, 1949 to The Bhavani Sahakari Bank Ltd., Mumbai vide Directive No. CO.DOS.SED.No.S2770/12-22-023/2025-2026 dated July 03, 2025 for a period of six months up to the close of business on January 04, 2026. The Reserve Bank of India is satisfied that in the public interest, it is necessary to further extend the period of operation of the Directive beyond close of business on January 04, 2026.