The Reserve Bank of India has undertaken a major regulatory overhaul by issuing consolidated Master Directions for all regulated entities, including Urban Cooperative Banks (UCBs) and Rural Cooperative Banks.
As part of this exercise, the RBI released 27 Master Directions for UCBs and 26 for Rural Cooperative Banks, many formulated in consultation with NABARD. The move streamlines decades of scattered circulars, bringing all instructions under a unified framework to simplify compliance and improve clarity.
In total, over 9,000 circulars and guidelines of the Department of Regulation were reorganised into 238 function-wise Master Directions across 11 categories, covering commercial banks, NBFCs and other institutions.
The draft versions, released on October 10, 2025, attracted more than 770 public comments; while suggestions requiring policy shifts were not considered, all relevant inputs were incorporated. The RBI has also withdrawn 9,445 outdated circulars, including nearly 1,000 related to cooperative banks.
Despite expectations from UCB leaders, the penalty clause tied to the Financially Sound and Well-Managed criteria has been retained in the final norms, covering both licensing and branch authorisation.
