Reserve Bank of India (Urban Co-operative Banks – Concentration Risk Management) – Amendment Directions, 2026

30-Apr-2026 , 04:44:33 pm | By CASANSAAR print

RBI/2026-27/39
DOR.CRE.REC.29/07-03-005/2026-27

April 29, 2026

Reserve Bank of India (Urban Co-operative Banks – Concentration Risk Management) – Amendment Directions, 2026

Please refer to Reserve Bank of India (Urban Co-operative Banks – Concentration Risk Management) Directions, 2025 (hereinafter referred to as ‘the Directions’).

2. On a review and in exercise of the powers conferred by the Sections 21 and 35A, read with Section 56 of the Banking Regulation Act, 1949; and all other enabling provisions / laws in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Amendment Directions hereinafter specified.

3. The Amendment Directions modifies the Directions as under:

3(1). In ‘Chapter I - Preliminary’ of the Directions, the following modifications shall be effected in Paragraph 4:-

(i) Sub-paragraph 4 (6) shall be substituted with following sub-paragraph:

‘Unsecured advances’ shall mean loans and advances, or a portion thereof, not covered by the realisable value of a security (primary as well as collateral) to which the UCB has a valid recourse.

Explanation 1: The realisable value of security shall be estimated on a realistic basis.

Explanation 2: Clean overdrafts; loans against personal guarantee; clean bills purchased or discounted; cheques purchased; and drawals allowed against cheques sent for collection shall be treated as unsecured advances.

Explanation 3: Advances granted to salaried employees against their personal guarantee may be treated as secured advances, if the UCB has a legally enforceable agreement with the borrower and the employer of the borrower which ensures deduction of periodic loan instalments by the employer out of the employee's salary / wages to meet the UCB's claims.

Explanation 4: Advances against receivables shall be treated as secured advances provided that such receivables ab initio have a tenure of not more than 180 days.