The Reserve Bank of India (RBI) has issued the Urban Co-operative Banks – Digital Banking Channels Authorisation Directions, 2025, introducing a comprehensive regulatory framework for digital banking services offered by UCBs. The Directions will come into effect from January 1, 2026.
Under the new framework, UCBs can offer two types of digital banking facilities-View Only and Transactional.
Banks with Core Banking Solution (CBS) and IPv6-enabled infrastructure may launch view-only services after submitting a GAICA report to RBI through the PRAVAAH portal.
For transactional services, prior RBI approval is mandatory. Banks must meet criteria including minimum capital/net worth of Rs 50 crore or as per licensing norms, regulatory CRAR compliance, robust internal controls, satisfactory cyber security record, and a CERT-In–audited GAICA report.
The Directions also mandate strict compliance with the IT Act, Digital Personal Data Protection Act, KYC/AML norms, and RBI’s customer protection guidelines. Banks must obtain explicit customer consent, ensure transparent communication of terms, provide network-independent mobile banking, and put in place strong risk-mitigation controls.
RBI has also extended several cyber security frameworks to UCBs and repealed earlier guidelines on digital banking for these banks. Existing approvals will continue to remain valid under the new Directions.
