Master Directions

RBI/DOR/2025-26/268
DoR.SOG(SPE).REC.No.187/13-04-001/2025-26

November 28, 2025

Reserve Bank of India (Regional Rural Banks – Miscellaneous) Directions, 2025

In exercise of the powers conferred by Section 26A and Section 35A of the Banking Regulation Act, 1949, and all other provisions / laws enabling the Reserve Bank of India (‘RBI’) in this regard, RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Directions hereinafter specified.

Chapter I – Preliminary

A. Short Title and Commencement

1. These Directions shall be called the Reserve Bank of India (Regional Rural Banks - Miscellaneous) Directions, 2025.

2. These Directions shall come into force with immediate effect.

B. Applicability

3. These Directions shall be applicable to

(1) Banks that have sponsored Regional Rural Banks (hereinafter collectively referred to as 'sponsor banks' and individually as a 'sponsor bank'), which shall be governed by paragraph 46 of these Directions; and

(2) Regional Rural Banks (hereinafter collectively referred to as 'banks' and individually as a 'bank').

C. Definitions

4. In these Directions, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below:

(1) 'Act' means the Banking Regulation Act, 1949 (10 of 1949); and

(2) ‘DICGC' means the Deposit Insurance and Credit Guarantee Corporation established under Section 3 of the Deposit Insurance Corporation Act, 1961.

5. Additional definitions have been provided in the respective chapters as per the applicability.

6. All other expressions, unless defined in the corresponding chapter, shall have the same meaning as have been assigned to them under the Reserve Bank of India Act, 1934, or the Banking Regulation Act, 1949, or any statutory modification or re-enactment thereto, or Glossary of Terms published by the RBI, or as used in commercial parlance, as the case may be.

Chapter II – Role of the Board

A. Board Approved Policies

7. A bank shall have separate Board-approved policies relating to:

(1) training of its staff matters as specified in paragraph 47 of these Directions;

(2) courses / certifications required for specialised areas of operations as laid out in paragraph 49 and paragraph 50 of these Directions;

(3) list of sensitive positions to be covered under mandatory leave requirements in terms of paragraph 51 of these Directions; and

(4) Business Continuity Plan (BCP) as specified in paragraph 54(1) of these Directions.

B. Reviews by the Board

8. The Board of a bank shall review:

(1) and update policies in respect of ‘mandatory leave' and BCP periodically as set out in paragraph 51 and 54(1) respectively of these Directions,

(2) month-wise training plan as per the provisions of paragraph 47(7) of these Directions.

(3) ‘Training Plans & Progress’ in its meetings as laid out in paragraph 47(14) of these Directions; and

(4) the report prepared by its top management regarding the adequacy of the bank's BCP in terms of instructions contained in paragraph 54(2) of these Directions.

Chapter III – Depositor Education and Awareness Fund

A. Definitions

9. In this chapter, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below:

(1) ‘Committee’ means the Committee constituted under the Fund;

(2) 'Fund' means the Depositor Education and Awareness Fund established by RBI under the Scheme notified vide Gazette Notification dated May 24, 2014, hereinafter referred to as the Scheme;

(3) 'Liquidator' means liquidator of a bank appointed under any law for the time being in force;

(4) 'Principal amount' means the amount, including interest, transferred by a bank to the Fund in terms of Section 26A of the Act;

(5) 'Amount due' means any credit balances in any account or any deposit in a bank remaining unclaimed or inoperative for ten years or more;

B. Credits to the Fund

10. A bank shall credit to the Fund the credit balance in any of the deposit account maintained with the bank which have not been operated upon for ten years or more, as applicable to the banking entity.

Explanation: A bank shall deposit the amounts to be credited to the Fund in the specified account maintained with RBI. The procedure for transfer is specified in paragraph 19 of these Directions.

11. A bank shall transfer to the Fund the entire amount as specified in the above paragraph, including the accrued interest that the bank would have been required to pay to the customer / depositor as on the date of transfer to the Fund.

12. Any expenditure incurred for the promotion of depositors’ education, awareness, interests and other purposes that may be specified by RBI under Section 26A (4) of the Act, shall be charged to the Fund.

C. Refunds and Interest

13. In case of demand from a customer / depositor (or legal heirs in case of deceased depositors) whose unclaimed amount / deposit had been transferred to the Fund, a bank shall repay the customer / depositor, along with interest if applicable, and lodge a claim for refund from the Fund for an equivalent amount paid to the customer / depositor.

Explanation: While there is no specific time limit prescribed in the Scheme for claiming a refund from the Fund by a customer / depositor, customers, depositors or legal heirs [in case of deceased depositor(s)] are encouraged to claim such amounts as soon as they become aware of unclaimed amounts.

14. The interest payable, if any, from the Fund on a claim shall accrue only from the date on which the balance in an account was transferred to the Fund to the date of payment to the customer / depositor. No interest shall be payable in respect of amounts refunded from the Fund, in respect of which no interest was payable by the bank to its customer / depositor.

15. A bank shall calculate the interest payable (by a bank to its depositors / claimants) on principal amount of unclaimed interest bearing deposits transferred to the Fund at the rate of 4 percent per annum up to June 30, 2018, 3.5 percent w.e.f. July 1, 2018 up to May 10, 2021 and at 3 percent with effect from May 11, 2021 till the time of payment to the depositor / claimant. Changes to the rate of interest, if any, payable on the principal amount transferred to the Fund shall be specified by RBI from time to time.

Explanation: The amount of interest payable in this behalf shall be calculated in the manner specified in paragraph 14 of these Directions and by rounding off the amount of interest to the nearest rupee.

16. In the case of a bank under liquidation, during the pendency of the liquidation proceedings, if any claim is received from depositors whose deposits were covered by DICGC insurance at the time of transfer to the Fund, the Fund shall pay to the liquidator, an amount equal to the amount that could have been claimed from DICGC with respect to such deposits, and with respect to all other amounts paid by the liquidator towards the amounts transferred to the Fund, whether insured by DICGC or not, the Fund shall reimburse the liquidator.

Explanation: In the case of a bank under liquidation, the depositor has to approach the Liquidator of the bank for claim and the Liquidator shall settle the claim as per the following procedure:

(1) Scenario 1: Claim on Deposits Covered by DICGC - If the deposits of a customer / depositor were covered by DICGC insurance at the time of transfer to the DEA Fund, then the Liquidator can claim an amount equivalent to what could have been claimed from DICGC, and then make payment to the depositor. If the above deposit amount is more than the insurance cover of DICGC, then the Liquidator shall claim the amount in excess of DICGC insurance cover only on reimbursement basis i.e., the Liquidator shall pay such amount to the depositor subject to meeting all the applicable requirements and thereafter submit a claim to DEA Fund for reimbursement.

(i) Illustration 1 (DICGC Insurance Cover is up to ₹5 lakh): A customer / depositor had a deposit claim of ₹4 lakh in a bank (including accrued interest), which is now under liquidation. The deposit was insured by DICGC at the time when the said unclaimed deposit was transferred to the Fund. Now, if the customer / depositor claims the same during the liquidation process, the following steps shall be followed:

(a) The customer / depositor / legal heir submits a claim for their deposit to the liquidator.

(b) Liquidator raises an equivalent claim of ₹4 lakh from the Fund along with necessary supporting documents

(c) The Fund will pay an amount equal to the insured deposit to the Liquidator. (In this case, i.e., ₹4 lakh since DICGC insurance cover is available up to ₹5 lakh)

(d) The Liquidator, after receiving the amount from the Fund, will pay to the customer / depositor i.e., ₹4 lakh.

(ii) Illustration 2 (DICGC Insurance Cover is up to ₹5 lakh): A customer / depositor had a deposit claim of ₹6 lakh in a bank (including accrued interest), which is now under liquidation. The deposit was insured by DICGC at the time when the unclaimed deposit of the customer / depositor was transferred to the Fund. Now, if the customer / depositor claims the same during the liquidation process, the following steps shall be followed:

(a) The customer / depositor / legal heir submits a claim for their deposit to the liquidator.

(b) Liquidator raises an equivalent claim of ₹6 lakh from the Fund along with necessary supporting documents.

(c) The Fund shall pay an amount equal to the insured deposit to the Liquidator. (In this case, i.e., ₹5 lakh, since DICGC insurance cover is available up to ₹5 lakh)

(d) For the remaining amount (i.e., ₹1 lakh) the Liquidator shall make the payment to depositor subject to meeting all the applicable requirements and then claim for the same from the Fund by way of reimbursement.

(2) Scenario 2: Claim on Deposits not Covered by DICGC - In respect of deposits not covered by DICGC at the time of transfer to Fund, the payment to the Liquidator by the Fund shall be made only on reimbursement basis (i.e., the Liquidator can only seek as a reimbursement after settling the amount to the customer / depositor) as mentioned in Illustration 2 above.

D. Registration Guidelines

17. Registration in e-Kuber system: A bank, if not already registered under the DEA Fund Module of the e-Kuber system, shall expeditiously register itself as a pre-requisite to remit the unclaimed amounts due and submit refund claims, as defined in the Scheme, in electronic form through e-Kuber system. A member bank, i.e., a bank with direct access to the e-Kuber system, shall share two e-mail ids with dea.fund@rbi.org.in to complete the registration process while a non-member bank shall provide two e-mail ids to its sponsor bank to complete the registration process. On completion of registration process, further communication from RBI shall be sent only to the two e-mail ids registered in the e-Kuber system.

18. Authorised Signatories: A bank shall designate up to a maximum of 10 officers as authorised signatories to operate the bank’s DEA Fund account jointly, who shall be responsible for authorising the applicable returns under the DEA Fund Scheme. It shall submit to RBI a certified true copy of the Resolution / Decision / Authorisation (in Hindi or English) of the Board / MD&CEO / ED / Committee of Executives empowered for the purpose along with the list of authorised signatories. Any update in the authorised officials shall be furnished in the prescribed format (Annex I), with details of both Resolution / Decision / Authorisation and specimen signatures of all the authorised signatories.

Explanation: A bank, while communicating the changes made, shall ensure to submit details of all such authorised signatories and their specimen signatures to RBI, instead of furnishing only the additions or deletions made.

E. Procedural Guidelines for Transfer and Claim

19. Procedure for Transferring Unclaimed Amount to the Fund: A bank shall transfer to the Fund, the amounts becoming due in each calendar month (i.e., proceeds of the inoperative accounts and balances remaining unclaimed for 10 years or more) as specified in paragraph 11 of these Directions, i.e. including the interest accrued on interest bearing accounts till the date of transfer, during the last five working days of the subsequent month. Before transferring the amount due to the Fund, the bank shall ensure that all legal obligations relating to the same, till that date, including those pertaining to taxes deductible and payable, are met or adequate arrangements are made for the same.

(1) Member Bank’s Own Account - A member bank shall transfer to the Fund, the entire amount due through e-Kuber system under the module “DEA Fund Services”. When a member bank is crediting amount due to the Fund, it shall furnish its DEA Fund Code in the “Bank DEA Fund Code” field and the detailed breakup (number of accounts and amount) of the deposits, viz., interest bearing deposits, non-interest bearing deposits and other credits, which also includes non-interest bearing amount (i.e., any amount other than deposits remaining unclaimed as mentioned in paragraph 10 of these Directions), in the fields provided for the same in the e-Kuber system.

(2) Other Bank’s (Non-member) Account - In case a sponsor bank is remitting the amounts due of non-member banks, it shall not consolidate but separately remit the amount bank-wise to the Fund, by indicating appropriate Bank DEA Fund Code of the other (non-member) bank in the field provided in the e-Kuber. It shall also provide the detailed break-up (number of accounts and amount) of the deposits, viz., interest-bearing deposits, non-interest bearing deposits and other credits in the respective fields, i.e., the fields designated for the same, in the e-Kuber system.

20. Window for transferring unclaimed amount and submission of claim

(1) Deposit Window: A bank shall ensure correctness of the amount and transfer unclaimed amounts / deposits to the Fund through e-Kuber during the last five working days of every month. A bank (including a non-member bank) shall effect only one transfer of unclaimed amounts per month. A non-member bank shall transfer the unclaimed amounts / deposits to its sponsor bank (through normal banking channel), sufficiently in advance of the due date, to enable the sponsor bank to transfer the same to the Fund through e-Kuber system. On receipt of the amount transferred to the Fund, an auto generated acknowledgement receipt will be directly sent from e-Kuber system to the registered e-mail ids of the bank.

(2) Claim Window: A bank shall ensure correctness of the amount and submit claim from the Fund in e-Kuber system during the first 10 working days of every month. A bank shall submit only one consolidated claim per month. A non-member bank shall submit the claim to its sponsor bank sufficiently in advance of the due date, to enable the sponsor bank to submit the same to RBI through e-Kuber system.

21. Procedure for Submitting Claim

(1) In case of demand from a customer / depositor, whose unclaimed amount / deposit had been transferred to the Fund, a bank shall repay the customer / depositor, along with interest, if applicable, and thereafter, lodge a claim for refund from the Fund for an equivalent amount paid to the customer / depositor. In case of any claim made by the customer / depositor for refund of only part amount, the bank shall repay the customer accordingly by making the account operative and keep the remaining amount (including the interest, if any) in the account, and thereafter lodge a claim for the entire amount from the Fund.

Explanation: A bank may refer Reserve Bank of India (Regional Rural Banks – Responsible Business Conduct) Directions, 2025 for operational guidelines on activation of inoperative accounts.

(2) On submission of a claim, an auto generated Form II (Annex III) from the e-Kuber system will be sent to the registered e-mail ids of the banks / non-member banks. A bank shall submit a printout of the auto generated Form II signed by the authorised officials and certified by the bank’s auditors (internal / concurrent) to RBI, by e-mail and/or by post, within three working days of its submission on the e-Kuber system. The bank / non-member bank shall also submit a copy of the latest half-year Form III (Reconciliation Certificate – Annex VII) and Annual Certificate (Annex VIII), while submitting the first claim during the half-year / year, as the case may be, along with the claim form - Form II, else it will result in non-consideration of claim of the bank.

(3) The claim will be examined by RBI. In case of a member bank, if the claim is in order, the claimed amount will be credited to the account of the member bank maintained with RBI by the end of the same month. In case of claims from the Fund by a non-member bank, RBI will credit the account of the sponsor bank and the sponsor bank shall credit the same to the non-member bank. The claim settlement / rejection advice will be sent on the registered e-mail ids.

(4) The claims will be processed by RBI based on the information provided by a bank in Form II. Therefore, the onus of making correct refund claims from the Fund shall lie solely with the bank.

(5) While a bank is not required to provide the customer-wise details in case of refund claims in Form II, it shall maintain the customer-wise details of claims at its end, duly certified by its auditors (internal/concurrent), which RBI may seek at a later stage / during the supervisory review process.

(6) Proper due diligence as required under Reserve Bank of India (Regional Rural Banks – Know Your Customer) Directions, 2025, as amended from time to time, shall also be carried out before making payments to customers. A bank shall verify the genuineness of the claims while making the process smoother and hassle free for the customers.

22. A bank shall have an appropriate internal operational procedure for the Fund which should specifically address error prevention mechanisms and rectification processes. Accordingly, the bank shall implement a Maker-Checker process to verify all deposit and claim entries for processing the entries.

23. A bank shall immediately report to RBI any errors, including:

(1) specific reasons for the error,

(2) details of checks and controls implemented to prevent recurrence, and

(3) assurance that such errors will not recur.

F. Returns

24. A bank shall submit in original (unless specified otherwise), the following returns duly certified by the specified auditors to Depositor Education and Awareness (DEA) Fund, Department of Regulation, Central Office, 12th Floor, Nariman Bhavan, Vinay K Shah Marg, Nariman Point, Mumbai - 400021, as also scanned copy in pdf form by email to dea.fund@rbi.org.in:

(1) Form I - Monthly Statement: At the end of every month, irrespective of transfer of deposits, the e-Kuber system will auto generate a Form I (Annex II) for a bank (including a non-member bank) and send it to their registered e-mail ids. A bank (or sponsor bank on behalf of its non-member bank), after verifying the correctness of Form I, shall submit the same online to RBI through e-Kuber system. The auto generated Form I is confirmed only if a bank (sponsor bank in case of non-member bank) agrees with the balances shown in Form I by ticking the two check-boxes on the screen of e-Kuber system a) “I Agree” and b) “Form has been duly audited by the bank’s auditors (internal/concurrent)”.

(2) Rectification Form: If a bank (sponsor bank in case of non-member bank) does not agree with the balances given in the Form I with regard to the details of transfers made / claims received including non-receipt of confirmation messages, then it shall bring the same to the notice of RBI by submitting the relevant rectification form duly signed by the two authorised officials and certified by the bank’s auditors (internal / concurrent), by post and/or email, within two weeks from identification of such discrepancy. A bank shall submit its rectification requests in the prescribed forms, as under:

(1) Form A (Annex IV): Deposit Related Rectification - Total deposit amount is correct but changes in accounts or amounts under Interest Bearing (IB)/Non-Interest Bearing (NIB)/Other Credits (OTH)

(2) Form B (Annex V): Deposit Related Rectification - Total deposit amount is incorrect

(3) Form C (Annex VI): Claim Related Rectification

A bank is responsible for ensuring the accuracy of these requests.

(3) Form III - Reconciliation Certificate: A bank shall, for independent and periodical verification of the balances, at the end of March and September every year, prepare and keep on record a Reconciliation Certificate (RC) - Form III (Annex VII) signed by two senior officers, other than those involved in transfer and refund claims for unclaimed deposits, and countersigned by the bank’s auditors (internal / concurrent), certifying that the balances of the bank as shown in its general ledger tally with the amount reflected in the Fund account of RBI. This certificate shall be prepared and completed with auditor(s) certification within a period of one month from the end of every half-year, i.e., April 30 and October 31 respectively. A bank shall note that submission of a copy of the latest half-year RC (Form III) to RBI is required, only whenever a first claim of the half-year is made by the banks and shall be submitted in Form III, which shall contain Unique Document Identification Number (UDIN) or Internal Document Identification Number of the bank’s auditors (internal / concurrent). To avoid any kind of avoidable discrepancies in reconciliation of the balances in the Fund, a bank shall take on record / account the transactions in its books on actual basis, i.e., only after settlement of claim / transfer of amount from / to the DEA Fund maintained by RBI.

(4) Annual Certificate by Statutory Auditor: An Annual Certificate (AC) indicating item-wise details of outstanding amount due at the year-end shall be obtained by a bank, from its Statutory Auditors in the prescribed format (Annex VIII). The same shall be submitted to RBI within one month from the date of completion of bank’s Statutory Audit but not later than September 30 of the subsequent financial year for which the AC pertains to. A bank shall furnish the AC, even if it is a ‘NIL’ return, to the RBI within the above stipulated period. The revised format of AC requires mandatory inclusion of UDIN of the Statutory Auditor.

G. Disclosure in Notes to Accounts

25. A bank shall disclose all unclaimed liabilities (where amount due has been transferred to Fund as also the amounts transferred to Fund in its financial statements and / or under the Notes to Accounts as specified in Reserve Bank of India (Regional Rural Banks – Financial Statements: Presentation and Disclosures) Directions, 2025.

H. Audit

26. A bank shall ensure all entries related to Fund are audited pre and post submission, signed by both authorised signatories and the bank’s auditors (internal / concurrent).

27. On the date of transferring the amount to the Fund, a bank should maintain customer-wise details verified by the concurrent auditors, including payment of up-to-date interest accrued, that has been credited to the deposit account till the date of transfer to the Fund, with respect to interest bearing deposits. With respect to non-interest bearing deposits and other credits transferred to the Fund, customer-wise details, duly audited, shall be maintained with the bank. The concurrent auditors shall also verify and certify that, as per the banks' books, the returns have been correctly compiled by the bank in the monthly and yearly returns submitted to RBI. The above returns shall also be verified by the statutory auditors at the time of annual audit.

I. Preservation of Records

28. Notwithstanding anything contained in the Banking Companies (Period of Preservation of Records) Rules, 1985, a bank shall preserve records or documents containing details of all accounts and transactions, including deposit accounts in respect of which amounts are required to be credited to the Fund permanently; and where refund has been claimed from the Fund, a bank shall preserve records or documents in respect of such accounts and transactions, for a period of at least five years from the date of refund from the Fund.

J. Furnishing of Information

29. If called upon by RBI or the Committee as defined at paragraph 9(1) of these Directions, to do so, a bank shall:

(1) pay the amount due to the Fund;

(2) furnish any information sought relating to unclaimed amounts and the inoperative accounts, from time to time; and

(3) submit relevant information in respect of an account or deposit or transaction for which a claim for refund has been filed.

K. Contact Details

30. A bank shall duly furnish the updated contact details (in case of any change) by e-mail to dea.fund@rbi.org.in in the prescribed format (Annex IX) for any correspondence with RBI relating to DEA Fund Scheme.

L. Interpretation of the Provisions of the Scheme

31. A bank may refer to the Scheme notified in the Official Gazette on May 24, 2014 for other details. If any issue arises in the interpretation of the provisions of the Scheme, the matter shall be referred to the Reserve Bank, and the decision of the Reserve Bank thereon shall be final.

Chapter IV – Services and Market Operations

A. Camps and Campaigns for Periodic Updation of KYC

32. The banks are advised to organize camps and launch intensive campaigns, including special camps, focusing on periodic updation of KYC, especially in rural and semi-urban branches and branches having large pendency in periodic updation of KYC. The banks may also facilitate the process of activation of such accounts by taking an empathetic view as indicated in Circular DoS.CO.PPG.SEC.12/11.01.005/2024-25 dated December 2, 2024.

Chapter V – Regulatory Compliance and Legal Matters

A. Legal Compliance

33. A bank shall issue suitable instructions to all its offices / branches to ensure attendance in courts on the date of hearing wherever they are involved.

34. A bank shall also ensure that there is no delay in preferring appeals or filing affidavits so as to avoid rejection of such applications, financial losses to the bank, and adverse impact on public interest.

35. To obviate the need for production of volumes of original records of the bank as evidence in legal proceedings before the Court or any other Competent Forum and also avoid administrative and procedural inconvenience caused in the event of such records remaining in the custody of the Court till completion of such proceedings, a bank may, in consultation with its Legal Adviser / Counsel, adopt the procedure as laid down under Section 4, read with the provision of Section 2(8), of the Bankers' Books Evidence Act, 1891.

36. A bank shall ensure that, notwithstanding the provisions of the Banking Companies (Period of Preservation of Records) Rules, 1985, original records / documents which are the subject matter of legal proceedings are preserved at the bank’s end till the final disposal of the proceedings.

B. Court Directives

37. A bank shall ensure that no money transaction of the company(ies), declared as 'defaulted companies' by the Hon'ble Patna High Court vide its order dated April 10, 2007, be permitted. This list containing the defaulted companies (numbering 918) declared by the Hon'ble Patna High Court are enclosed in Annex XII.

38. A bank shall not cite or quote from the RBI circular dated April 06, 2018 DBR.No.BP.BC.104/08.13.102/2017-18 dated April 06, 2018 as it was set aside by the Hon'ble Supreme Court on March 04, 2020 in the matter of Writ Petition (Civil) No.528 of 2018 (Internet and Mobile Association of India v. Reserve Bank of India) and is, therefore, not valid from the date of the Supreme Court judgement.

Explanation: A bank shall, however, continue to carry out customer due diligence processes in line with regulations governing standards for Know Your Customer (KYC), Anti-Money Laundering (AML), Combating of Financing of Terrorism (CFT) and obligations of regulated entities under Prevention of Money Laundering Act, (PMLA), 2002 in addition to ensuring compliance with relevant provisions under Foreign Exchange Management Act (FEMA) for overseas remittances.

C. Inter-Governmental Agreement (IGA) with United States of America (US) under Foreign Accounts Tax Compliance Act (FATCA) - Registration

39. A bank, if not already registered with US authorities as per the Government of India’s Inter-Governmental Agreement (IGA) with US to implement Foreign Accounts Tax Compliance Act (FATCA), shall register itself and obtain a Global Intermediary Identification Number (GIIN).

Provided that, the above requirement shall not apply to a bank fulfilling the following criteria which shall be treated as a 'deemed compliant Foreign Financial Institution (FFI)' within the meaning of the Agreement:

(1) the bank does not have more than $175 million in assets on its balance sheet;

(2) the bank and any related entities, taken together, do not have more than $500 million in total assets on their consolidated or combined balance sheet;

(3) the bank is not authorised to open accounts or accept deposits from NRIs.

Chapter VI – Financial Conduct and Prohibited Activities

A. Prohibition on Acceptance of Deposits at the Instance of Private Financiers / Unincorporated Bodies

40. A bank shall not accept deposits at the instance of private financiers / unincorporated bodies under any arrangement which provides for either the issue of deposit receipts favouring the clients of private financiers or the giving of authority by power of attorney, nomination or otherwise for such clients to receive such deposits at maturity.

Explanation:

(1) Issuance of a Cash Certificate / Fixed Deposit Receipt by a bank under instructions from a person other than the depositor themselves (or their duly constituted attorney) is not only contrary to normal banking practice but also against the spirit of RBI directives on interest rates on deposits which presuppose acceptance of deposits by a bank directly from the depositors by complying with normal requirements such as application from the depositor, furnishing of specimen signature, etc.

(2) Section 45ZB of the Banking Regulation Act, 1949 precludes banks from recognising any claim of any person, other than the one in whose name the deposit is held to the deposit amount except pursuant to any direction of a court of competent jurisdiction.

(3) Chapter IIIC of the Reserve Bank of India Act, 1934, introduced through the Banking Laws (Amendment) Act, 1983, imposes restrictions on unincorporated bodies in relation to acceptance of public deposits. Accordingly, association of a bank with the deposit acceptance activities of unincorporated bodies may lead to violation of statutory provisions.

B. Prohibition on Association with Prize Chit Schemes and Sale of Lottery Tickets

41. Pursuant to the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 which bans the promotion and conduct of prize-chit schemes and also provides for deterrent penalties for those who are guilty of breach of the provisions thereof, a bank shall desist from participating or associating in such prize-chit schemes floated by any of the non-banking financial institutions in any form.

Explanation: While mere opening of accounts in the name of prize chit firms / companies and issue of cash certificates / deposit receipts in favour of the members of such firms / companies by a bank may not be construed as violative of any specific provision of law; the aforesaid types of activities and transactions by banks would come within the term "associate" as used above and a bank shall, therefore, desist from such type of association.

42. Accordingly, a bank shall:

(1) make enquiries with a company / firm desirous of opening such accounts, that it is not carrying on the activities banned by the Prize Chits and Money Circulation Schemes (Banning) Act, 1978; and

(2) not open accounts or issue cash certificates / deposit receipts in respect of prize chit companies or firms / their members when the activities / schemes of the company are falling within the purview of the said Act.

43. A bank shall not associate itself directly or indirectly with lottery schemes of organisations of any description.

Explanation: Lottery falls within the expression "prize chit" under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 referred to in paragraph 41 above. Further, sale of lottery tickets on bank counters could be open to abuse and avoidable complaints from members of public.

44. A bank shall issue necessary instructions with respect to Directions contained in paragraphs 40 to 43 to its branches for compliance.

Chapter VII – Taxation and Accounting Related Matters

A. Demand for Information by Income Tax Authorities

45. In view of the provisions of Section 133A of the Income-Tax Act, 1961 and past experience regarding the exercise of inspection powers by Income Tax Authorities, the Government had conveyed, vide its letter No.8(42)73/Accts. dated December 5, 1975 addressed to public sector banks, clarification from Central Board of Direct Taxes that blanket inspections of bank records not linked to any specific assessment are not envisaged under the said provision. Accordingly, if a bank is of the view that a particular Income Tax Officer is exceeding their jurisdiction, the matter may be brought to the notice of the concerned Commissioner of Income-tax. However, it may be noted that Government had conveyed, vide its letter dated June 14, 1977, that under Section 133(6) of the Income Tax Act, Income Tax Officer can call for information regarding call deposits and fixed deposits of ₹50,000 or above, after duly recording his reasons for making the requisition.

Chapter VIII – Human Resource and Capacity Building

A. Training and Awareness

46. To address the training needs of staff of a Regional Rural Bank (RRB) sponsored by it, a sponsor bank shall:

(1) ensure that the MOU entered into with the RRB includes training as one of covenants;

(2) help the RRB in devising modules for training on Insurance, Marketing, NRI deposits, CBS, Mobile Banking, Network Banking, KYC, AML, etc. through its Training Establishments (TEs);

(3) provide training to resource persons of the RRB as Trainers Training Programmes (TTP) for equipping them on appropriate modules and increase participation of RRB officers through in campus or on location training programmes of their TEs; and

(4) undertake review progress of training while conducting Management Audit.

47. To address the training requirements of its staff, a bank shall:

(1) have a Board approved training policy;

(2) get a definite budget approved every year, by the Board, for trainings;

(3) carry out Training Need Analysis (TNA) of entire staff members taking assistance from professional / experienced institutions like BIRD, NBSC etc.;

(4) identify the various training programmes needed for their staff members with the help of sponsor banks training establishments;

(5) prepare suitable training modules and training kits for identified training programmes;

(6) prepare separate training modules for officers, clerical staff and subordinate staff on credit appraisal, NPA management, basic computer skills and soft skills including customer relations management;

(7) prepare month-wise training plan for all staff members and get it approved by its Board;

(8) consider providing one training hall at Head Office (HO) / Regional Office (RO) with essential training infrastructure and earmark one officer to coordinate their training requirements / activities.

(9) arrange for on-location training programmes of short duration (one or two days) to avoid wastage of time in traveling including need based programmes for branch staff by TEs of NABARD or any other TEs;

(10) consider engaging Mobile Job Trainers for training of staff in far flung areas on operational matters, especially for computerization;

(11) carry out training for clerical and subordinate staff on regular basis in the Rural Banking Training Centres (RBTCs), TEs of Sponsor Banks and other suitable TEs;

(12) ensure participation of all staff members in training programmes;

(13) introduce a system of maintenance of Training cards for its staff incorporating the training programmes undergone by the staff members during current year and training courses identified during next year;

(14) place "Training Plans & Progress" in the meetings of Board of Directors for review; and

(15) include training as one of covenants of MOU to be entered with Sponsor Banks.

48. A bank may primarily use the TEs of NABARD, RBI and Sponsor Banks for training of its Officers / Staff. Further, it may identify other training institutions where staff may be deputed for training programmes, so as to provide training effectively to all types of cadres / staff.

Provided that, a bank having more than 100 branches may preferably have its own training centers, well equipped with computer laboratory. These training centers may be set up in available space in its HO / RO or by hiring space from outside, instead of investing in new infrastructure for the purpose. Short term training programmes (two or three days) on operational issues should be conducted in the training center having well equipped computer laboratory.

A bank having less than 100 branches may continue to avail the training facility from its Sponsor Bank's TEs, TEs of NABARD or from training centers of other RRBs, instead of setting up its own training centers.

B. Certifications

49. A bank shall identify specialised areas for certification of the staff manning key responsibilities. While a bank shall retain the flexibility to require certification for any area of work, it shall make acquiring of a certificate course mandatory for staff before their posting in the following areas:

(1) treasury operations – dealers, mid-office operations;

(2) risk management – credit risk, market risk, operational risk, enterprise-wide risk, information security, liquidity risk;

(3) accounting – preparation of financial results, audit function;

(4) credit management – credit appraisal, rating, monitoring, credit administration; and

(5) marketing of third-party retail products and wealth management to address the issues of mis-selling and to minimise customer complaints.

Provided that,

(i) if an employee has already acquired relevant graduate, diploma and certificate courses offered by reputed universities, the same may also be considered as an accreditation/ certification; and

(ii) in case of work area mentioned at (v) above, where other financial sector regulators have prescribed any certifications, these shall be complied with.

50. A bank shall identify from the list of courses / certifications recognised by IBA as meeting certification requirements for different work areas mentioned above, those that are suitable for its operations and put in place a Board-approved policy, mandating obtainment of such certifications by its employees working in the respective areas.

Chapter IX – Operational and Administrative Matters

A. Mandatory Leaves

51. A bank shall, as per the Board-approved policy referred to in paragraph 7(3) above, prepare a list of sensitive positions to be covered under 'mandatory leave' requirements and the list shall be reviewed periodically.

52. As per the mandatory leave policy, the employees posted in sensitive positions or areas of operation shall be compulsorily sent on leave for a few days (not less than 10 working days) in a single spell every year, without giving any prior intimation to these employees, thereby maintaining an element of surprise.

53. A bank shall ensure that employees, while on mandatory leave, do not have access to any physical or virtual resources related to their work responsibilities, except internal / corporate email which is usually available to all employees for general purposes.

B. Business Continuity Planning (BCP)

54. The responsibility in respect of Business Continuity Planning (BCP) shall rest with the Board and the top management of a bank, as specified hereunder:

(1) The Board shall provide top management clear guidance and direction in relation to BCP and fulfil its responsibilities by approving policy on BCP, prioritizing critical business functions, allocating sufficient resources, reviewing BCP test results and ensuring maintenance and periodic updation of BCP. A copy of the BCP approved by the Board may be forwarded for perusal to the Chief General Manager, NABARD, Department of Supervision (DoS), Head Office, Plot No.C-24, 'G' Block, Bandra-Kurla Complex, Post Box No.8121, Bandra (East), Mumbai 400 051.

(2) The top management shall be responsible for executing such a BCP, if contingency arises. They shall annually review the adequacy of the institution's business recovery, contingency plans and the test results and put up the same to the Board. They shall also evaluate the adequacy of contingency planning and their periodic testing by service providers whenever critical operations are outsourced.

Explanation: The BCP requirements enunciated in these Directions shall be considered as a minimum and the onus is on the Board and the Top Management for generating detailed components of BCP in light of individual bank's activities, systems and processes. A bank shall also be guided by the Guidance Note issued vide Circular No. NB.HO.DoS.Pol./657/J-1/2024-25 dated May 10, 2024.

55. A bank shall develop an effective BCP that considers and addresses:

(1) the potential for wide-area disasters that impact an entire region and for the resulting loss or inaccessibility of staff;

(2) interdependencies, both market-based and geographic, among financial system participants as well as infrastructure service providers; and

(3) project management procedures, change management process, etc.

56. The BCP methodology shall include, inter alia,

(1) identification of critical businesses, owned and shared resources with supporting functions (the BCP template);

(2) structured risk assessment based on comprehensive business impact analysis; and

(3) critical and tough assumptions in terms of disaster so that the framework is exhaustive enough to address the most stressful situations.

57. Based on a sound methodology, a bank shall initiate a development plan for the Data Recovery System (DRS) / BCP. The plan shall be continuously evaluated and revised whenever the bank forays into new business tools and areas, either as part of a re-engineering process or for introducing new products and services.

58. The relevant portion of the BCP adopted may also be disseminated to all concerned, including the customers, so that awareness would enable them to react positively and in consonance with the BCP. The part of the plan kept in the public domain shall be confined to information relating to the general readiness of the bank in this regard without any detailed specifics.

59. While a bank may consider cost-effective strategies of BCP, the strategies considered shall provide an adequate level of comfort and assurance in tackling serious disruptions. Moreover, the mitigating solutions shall be commensurate with the nature and complexity of its business operations.

60. A bank may also consider insurance as a risk mitigation strategy for externalizing risks to a third party so as to reduce financial exposure in the event of disruptions. However, the bank shall exercise diligence in regard to the nature of insurance and the certainty of payments.

C. Statement of Immovable Property

61. A bank shall obtain from its officer staff (whether on probation, temporary / confirmed) statements similar to those obtained by Indian banks in the public sector under Regulation 20 of Officer Employees' (Conduct) Regulations, as amended from time to time.

Chapter X – Repeal Provisions

A. Repeal and Saving

62. With the issue of these Directions, the existing Directions, instructions, and guidelines relating to areas covered in these Directions as applicable to Regional Rural Banks stand repealed, as communicated vide circular DOR.RRC.REC.302/33-01-010/2025-26 dated November 28, 2025. The Directions, instructions, and guidelines repealed prior to the issuance of these Directions shall continue to remain repealed.

63. Notwithstanding such repeal, any action taken or purported to have been taken, or initiated under the repealed Directions, instructions, or guidelines shall continue to be governed by the provisions thereof. All approvals or acknowledgments granted under these repealed lists shall be deemed as governed by these Directions. Further, the repeal of these directions, instructions, or guidelines shall not in any way prejudicially affect:

(1) any right, obligation or liability acquired, accrued, or incurred thereunder;

(2) any penalty, forfeiture, or punishment incurred in respect of any contravention committed thereunder;

(3) any investigation, legal proceeding, or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture, or punishment as aforesaid; and any such investigation, legal proceedings or remedy may be instituted, continued, or enforced and any such penalty, forfeiture or punishment may be imposed as if those directions, instructions, or guidelines had not been repealed.

B. Application of Other Laws not Barred

64. The provisions of these Directions shall be in addition to, and not in derogation of the provisions of any other laws, rules, regulations, or directions, for the time being in force.

C. Interpretations

65. For the purpose of giving effect to the provisions of these Directions or in order to remove any difficulties in the application or interpretation of the provisions of these Directions, the RBI may, if it considers necessary, issue necessary clarifications in respect of any matter covered herein and the interpretation of any provision of these Directions given by the RBI shall be final and binding.

(Dr. Sudarsana Sahoo)
Chief General Manager