The Reserve Bank of India (RBI) has amended its Urban Cooperative Banks (Credit Facilities) Directions, 2025, introducing key clarifications aimed at providing greater flexibility in project financing by Urban Cooperative Banks (UCBs). The amendments came into effect immediately.
Under the Reserve Bank of India (Urban Cooperative Banks- Credit Facilities) Second Amendment Directions, 2026, RBI has clarified that where a project can be operationalised as multiple independent and viable units, a UCB may, at its discretion, finance each unit as a separate project.
However, each unit must have its own financial closure and be independently appraised for standalone viability before sanctioning finance.
The central bank has also issued a clarification relating to electricity generation projects. For projects involving both power generation and transmission (evacuation infrastructure), the requirement relating to the Right of Way (RoW) for transmission may be determined in accordance with the relevant provisions of the Directions.
The RBI said the amended directions have come into force with immediate effect.
