Master Directions

RBI/DOR/2025-26/296
DOR.LIC.REC.No.331/07-01-000/2025-26

December 04, 2025

Reserve Bank of India (Rural Co-operative Banks - Branch Authorisation) Directions, 2025

In exercise of the powers conferred by Section 23 read with 56 of the Banking Regulation Act, 1949, the Reserve Bank of India (‘RBI’) being satisfied that it is necessary and expedient in the public interest to do so, 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 (Rural Co-operative Banks - Branch Authorisation) Directions, 2025.

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

B. Applicability

3. These Directions shall be applicable to Rural Co-operative Banks (RCBs), hereinafter collectively referred to as 'banks' and individually as a 'bank'.

In this context, ‘Rural Co-operative Banks’ shall mean State Co-operative Banks (StCBs) and Central Co-operative Banks (CCBs), as defined in the National Bank for Agriculture and Rural Development Act, 1981.

C. Definitions

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

(1) ‘Area of Operation’ of a bank means the geographical area/s of operation stated in its byelaws, as approved by the registering authority and the Reserve Bank.

(2) ‘Administrative Office’ or ‘Controlling Office’ means a corporate, regional, zonal, or any other office, by whatsoever name called, that exercises control or oversight functions on Branches / Offices falling under its jurisdiction and undertakes internal administrative functions including oversight of bank’s own staff and carries out no banking or business transactions.

(3) ‘Back Offices’ means a Central Processing Centre (CPC) or an Office, by whatever name called, that exclusively attends to functions such as data processing, processing of loans, verification and processing of documents, issuance of cheque books, demand drafts etc. on requests received from other branches and carries out other functions incidental to banking business.

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

Chapter II – Branch Authorisation

A. Eligibility Criteria for Business Authorization (ECBA)

6. Based on a comprehensive review, it has been decided to issue harmonised eligibility criteria for banks for certain business authorizations / permissions / approvals. These criteria, as given below, will henceforth be referred to as Eligibility Criteria for Business Authorization (ECBA).

7. A bank will be considered as fully complying with ECBA if it meets the following conditions, based on the audited financial statements as of 31st March of the immediately preceding financial year: 

1. The CRAR should be at least one percentage point above the minimum CRAR applicable to the bank as on the reference date;

2. Net NPAs of not more than 3%;

3. Net profits during the preceding two financial years;

4. No default in the maintenance of CRR / SLR during the preceding and current financial year till the time of Board resolution declaring the bank as ECBA compliant / application for authorization;

5. Core Banking Solution (CBS) fully implemented; and

6. The bank should not be under any Directions / Supervisory Action Framework / PCA of RBI / NABARD, as the case may be, at the time of Board resolution declaring the bank as ECBA compliant/ application for authorization;

8. A bank shall determine its compliance with the ECBA every year based on the audited financial statements as of 31 March of the immediately preceding FY and place it before its Board within 30 days from the date of adoption of the audit report. The Board shall satisfy itself about the compliance of the bank with ECBA and pass the necessary resolution approving the same and inform the Reserve Bank and NABARD within 15 calendar days from the date of the Board resolution as per the format given in Annex I. A bank not complying with ECBA need not inform the Reserve Bank / NABARD in this regard. The period of validity of compliance with ECBA will be considered to be till 30th September of next FY, or the date the bank is declared non-compliant with ECBA by the supervisor, or till the date of next self-review, whichever is earlier.

Example: If a bank determines itself to be in compliance with ECBA in August 2025 based on audited figures as of March 31, 2025, it would be considered compliant with ECBA till September 30, 2026; except in following cases:

1. It is declared non-compliant with ECBA in the next statutory inspection (a review will be carried out by the supervisor based on assessed figures as of March 31, 2025); or

2. It is declared non-compliant with ECBA (effective from the date of Board resolution) in the next self-review based on audited figures for the next financial year (in this case, as of March 31, 2026).

9. The above process is subject to review by the Reserve Bank, including supervisory review. In case during the supervisory review of NABARD, or even otherwise, if a bank, which has declared itself compliant with ECBA is found to be non-compliant, the bank shall be subject to appropriate supervisory and / or enforcement action as deemed fit by the Reserve Bank, including but not limited to debarment from self-reviewing itself as ECBA compliant for a period of minimum of one year.

B. Area of Operation of District Central Co-operative Banks (DCCBs)

10. The area of operation of DCCBs is decided by the State Government concerned by passing an order to that effect. Any change in the extant area of operation that takes place due to the splitting / reorganisation of districts is also notified by the State Government by issuing an order to that effect. Therefore, DCCBs desirous of amending their area of operation shall approach the Reserve Bank along with the notification from the State Government, a resolution passed to this effect by their Board and the amended byelaws registered with Registrar of Co-operative Societies (RCS). DCCBs do not require NOC from the Reserve Bank for amendment of byelaws in this regard and may directly approach the Reserve Bank for amendment in the banking license with the above-mentioned documents.

C. Opening of a New Place of Business

11. Prior permission from the Reserve Bank is required for opening a new place of business including Branches, Extension Counters, ATMs, Controlling Offices (Regional / Zonal /Administrative Office), Central Processing Centres, Regional Collection Centres, Retail Asset Processing Centres, Service Branches, Back Offices etc. or for changing the location of any existing place of business under Section 23 of the BR Act, 1949 read with Section 56 thereof. Opening a new place of business without valid authorization (except in cases permitted by the Reserve Bank) is a violation of the said Act and is liable for penal action. The reporting of opening a new place of business shall be as per procedure given in Chapter III of this Master Direction.

12. The bank should ensure that there are no restrictions imposed by the local development or other authorities for setting up a commercial establishment in the locality where the new place of business is proposed to be opened. It is incumbent upon the bank to ensure that its branches are operating from premises that have a valid lease agreement and are free of any dispute between the bank and the landlords of the premises in question.

13. The conditions for opening of a new place of business are as under:

D. Opening of a branch under Automatic Route

14. A bank is eligible to open a branch in its area of operation (including the upgradation of an extension counter that is in operation for more than three years) under the automatic route subject to the following conditions:

1. The bank shall be in compliance with ECBA; and

2. The bank should have sufficient headroom capital (methodology given in Part C of Annex II).

15. The eligible banks are permitted to open new branches up to 15 per cent of the number of full-fledged branches (at the end of the previous financial year) in a financial year (rounded off to the nearest whole number) subject to a minimum of one branch and maximum of 10 branches without having the need to take permission from Reserve Bank of India.

16. Branch opening under the automatic route is available only for a bank which has obtained a valid branch authorization from the Reserve Bank for all its existing branches. 

17. A StCB is permitted to open a branch under automatic route only in the State capital and one branch in each district, provided there is no other branch of any DCCB in that district.

18. A DCCB is permitted to open a branch under automatic route only in a centre having population of minimum one lakh as per latest census.

19. The bank shall put in place a policy for opening branches, approved by its Board of Directors. While formulating the said policy, the bank shall bear in mind its financial health, viability of the proposed branches and bank’s ability to render satisfactory customer service. The policy must be reviewed periodically to keep it aligned with the evolving banking landscape and revision, if any, in Reserve Bank guidelines. Further, the bank shall ensure that the proposal for opening of such branches in a particular financial year, based on the policy, is duly approved by its Board of Directors.

E. Opening of a branch under Prior Approval Route

20. Banks in compliance with ECBA and desirous of opening of branches of more than 15 per cent allowed under automatic route, may apply for opening branches under the Prior Approval Route by submission of a single Annual Business Plan (ABP) (format given in Annex II) in a financial year, along with application as per Form V of the Banking Regulation (Co-operative Societies) Rules, 1966. The bank shall have a policy as at para 19.

21. ABP for a financial year, should be submitted by the bank well in advance. The Reserve Bank will process and convey the decision within 90 calendar days of receipt of the complete application from the bank. The approval granted by the Reserve Bank for opening the branch will be valid till March 31 of concerned financial year, by which time the branch must be operationalised, or else the approval will lapse automatically.

22. The permission for opening of a branch will be strictly in the order of preference given by the bank. No request for change of order of preference would be entertained thereafter. Non-operationalisation of at least 75 per cent of approved branches within permitted time would be viewed seriously and may impact the approvals in future, including debarment from opening new branches for the next two years.

F. Additional Conditions for StCB for Opening a Branch

23. In a three-tier structure consisting of StCB at the apex level, DCCB at the intermediate level and Primary Agricultural Credit Society (PACS) at the ground level, a StCB will normally be allowed to open branch / extension counter in state capital only. In case a branch is required in district headquarters, the bank may open a branch only for maintaining and servicing deposits of co-operative banks. In semi-urban / rural areas, where DCCB is non-existent, weak or virtually defunct, StCB may be allowed to open a branch, provided the DCCB in the adjoining district is not in a position to extend its area of operation to cover the area (where DCCB is non-existent in the concerned district) or to take over the weak / defunct DCCB through merger. Such StCB shall clearly justify the reasons for opening each branch / extension counter while applying under ABP. In a two-tier co-operative credit structure consisting of StCB and PACS, a StCB may open branch / extension counters in urban as well as rural areas. However, the StCB shall also clearly justify the reasons for opening each branch / extension counter while applying under ABP. In all such cases, the recommendations of the RCS of the state will be required.

24. StCBs registered in the north-eastern states are permitted to open / shift branches / ECs anywhere in their area of operation, so long as they continue to function as the central financing agency extending the area of operation to the entire state.

G. Opening of an Extension Counter (EC)

25. An EC may be opened within the premises of educational institutions, big offices, factories and hospitals of which the co-operative bank concerned is the principal banker. The bank shall obtain a declaration from the institution in which it proposes to open EC in the format as per Annex IV. Other bankers to such entities may also open an EC provided it is not considered feasible by the principal banker and / or the base branch of the principal banker is beyond 10 kilometres from the proposed EC, after obtaining written consent from the principal banker. An EC may also be opened in the residential colonies provided no other branch / EC is already existing in the colony and no restrictions have been imposed by the local development or any other authorities for setting up a commercial establishment in the residential colony / locality. No extension counter should be opened in a marketplace, shopping centre, etc. Only one EC is permitted within a premise.

26. Base branch of the bank to which the proposed EC is linked should be within a distance of 10 kilometres. The transactions carried out in the EC should be incorporated in the accounts of the base branch on a day-to-day basis.

27. While opening an EC, the bank should take into account important factors such as need, viability, and overall merits of opening the EC, including the bank’s ability to deploy adequate resources and exercise internal controls.

28. The facilities at an EC should be restricted to:

1. deposit / withdrawal transactions;

2. issue and encashment of drafts and mail transfers;

3. issue and encashment of travellers' cheques; collection of bills;

4. advances against fixed deposits of their customers (within the sanctioning power of the officials concerned at the EC);

5. disbursement of other loans (only for individuals) sanctioned by the Head Office / base branch up to the limit of ₹10.00 lakh; and

6. safe deposit locker facility, subject to adequate security arrangements, as contained in guidelines issued by the Reserve Bank from time to time.

H. Operationalisation of an ATM / CDMs / CRMs

29. A bank may offer all its products and services through the ATM channels, provided the technology permits and adequate checks are put in place. The business transacted at the ATM shall be recorded in the books of the respective base branch / Centralised Data Centre. Third-party advertisement on the ATM screens, such as the display of products of other manufacturers / dealers / vendors, is not permitted. However, the bank may utilize the ATM screens to display their own products, or products for which it acts as an agent, or customer service / financial inclusion / cyber safety messages. These guidelines shall also be applicable to CDMs and CRMs.

I. Shifting of a Place of Business

30. A bank is permitted to shift its branches, extension counters, offices within the same city, town or village without prior approval of the Reserve Bank. The shifting of an EC will be subject to the distance of the proposed location being within 10 kilometres from the base branch. 

31. The decision to shift a place of business shall be taken by the Board after taking into account all the relevant factors, including viability, and should be properly recorded / minuted in the proceedings of the Board meeting.

32. Proper notice should be given to all existing depositors / clients of the branch / EC through SMS / public notice / letters at least one month in advance of shifting.

33. A bank can shift its off-site ATMs in its area of operation without prior approval of the Reserve Bank.

34. Closing a branch / EC in one city / town and opening in another shall not be construed as shifting. However, a bank may shift its office, except Head Office, from one town / city to another within its area of operation, without prior approval of the Reserve Bank.

35. Splitting of a branch or part shifting of some of the departments of the parent office / branch can be made to a nearby location within the same locality / municipal ward due to space constraints and for better customer service or for convenience of the members without prior permission of the Reserve Bank, subject to the condition that there is no overlap in business conducted from both the premises.

J. Closure of a Place of Business

36. A bank is allowed to close its branches / extension counters / ATMs / offices, except the Head Office, without prior approval of the Reserve Bank. Closure of a branch / extension counter shall be subject to the following conditions:

1. The bank should not have been placed under any Directions under section 35A of the Banking Regulation Act, 1949 (AACS).

2. The decision to close down the branch / EC should be taken by the Board after taking into account all the relevant factors and should be properly noted in the official record of proceedings of the Board meeting.

3. The bank should give two months' notice in advance to all existing depositors / clients of the branch, including through press releases in leading local newspapers, as well as communicate to each constituent of the branch well in advance of the closure of the branch.

4. The bank should report to the Reserve Bank, as per the timeline (reporting format given in Annex III), along with copies of the Board resolution.

5. The bank should surrender the branch license in original, wherever applicable, to the Reserve Bank within 15 calendar days of closing the branch.

6. The bank should preserve all the relevant records and make them available to the Reserve Bank / NABARD for scrutiny.

K. Doorstep Banking Services

37. A bank may provide doorstep banking services to its customers on a voluntary basis, without prior approval of the Reserve Bank.

38. The bank may formulate a scheme for providing doorstep banking services to its customers, with the approval of their Boards, in accordance with the guidelines provided in Annex V. The details of the scheme may be informed to the Reserve Bank within 15 calendar days of implementing the scheme.

39. A bank having deposit of more than ₹1000 crore as on March 31 of previous financial year may offer doorstep banking services to customers either directly through its own employees or through agents. Other banks shall offer doorstep banking services only through their permanent employees. The bank shall take into account the various risks that may arise on account of offering Doorstep Banking Services, such as outsourcing risk, operational risk, reputational risk, etc., to customers either directly through its own employees or through agents and take all necessary steps to manage the same.

40. The operation of the scheme may be reviewed by the Board of the bank on an annual basis.

L. Shifting, Acquisition, Surrender of Leased Premises, etc. of Co-operative Banks not complying with Section 11(1) of BR Act, 1949 (AACS)

41. A bank not complying with provisions of section 11 (1) of the Banking Regulation Act, 1949 (AACS) is required to obtain prior approval of the Reserve Bank for:

1. Sale of bank's own premises;

2. Surrender of existing premises taken on lease / rental basis;

3. Acquisition of new premises on ownership or lease / rental basis; and

4. Shifting of offices / departments as a result of sale of premises / surrender of premises / acquisition of new premises.

42. Banks are required to obtain approval from the Reserve Bank by submitting the application through PRAVAAH portal as per the enclosed format given in Annex VII. The bank should not enter into any firm commitment to the acquisition of premises for shifting an office thereat until the Reserve Bank's prior approval has been obtained. Therefore, if a bank has inadvertently made any such commitment, it should, in its own interest, take steps to cancel or nullify it. Reserve Bank will not consider any request for reconsidering its decision in such cases on the grounds that the bank has already acquired the premises or entered into an agreement for the same.

Chapter III – Reporting

A. Proforma and Reporting of Bank / Branch Details under the Central Information System for Banking Infrastructure (CISBI)

43. The CISBI portal (https://cisbi.rbi.org.in) has been web-deployed by the Reserve Bank. Under this system, banks are required to submit their information in a single Proforma (Annex I of CISBI) online on the CISBI portal. The instructions for submission of Proforma online are given in Annex II of CISBI. The CISBI portal contains the relevant circulars, user manuals and other relevant documents to facilitate reporting.

44. The Reserve Bank has provided login credentials to Nodal Officers of banks for submitting their information in CISBI. Access to CISBI can also be sought by making an e-mail request at cisbi@rbi.org.in. Banks should submit information on the CISBI portal as per guidelines given in Annex VI, and thereafter, bank branch / office / NAIO / CSP codes would be allotted by CISBI after due validations. In case of status change, banks need to edit only the relevant part. All banks should submit immediately and, in any case, not later than seven calendar days, the information relating to the opening, closure, merger, shifting and conversion of bank branches / offices / NAIOs / CSPs online through the CISBI portal.

45. Further, in order to ensure the correctness of data on CISBI, in the last week of every month, banks shall generate a 'NIL Report' in CISBI for the position as on last day of the previous month, indicating the total number of functioning branches, offices, NAIOs, CSPs; and submit it through CISBI after authenticating its correctness. Banks can also use the facility to access / download the data related to them.

46. It is further advised that CISBI also has a provision to maintain complete bank-level details (example, bank category, bank group, bank code, type of license issued, registration details, area of operation, addresses of offices, contact details of senior officials, etc.) and history of all the changes with a time stamp. After gaining first-time access to the system, banks shall ensure to submit correct and updated bank-level information in all the fields where submission / updation rights are available with the bank. After the initial submission of information on the CISBI portal, a one-time confirmation stating that "correct and updated Bank level information has been submitted on CISBI" shall be sent by banks to the Regional Office concerned of the Reserve Bank. Any subsequent changes in the bank-level information shall be submitted for updation on the CISBI portal on an immediate basis by the banks. The banks shall enter the complete and clear (without abbreviations) particulars on the Banking Channel Name, Address, geotagging, etc.

47. Reporting Timeline: Reporting on the CISBI portal within the prescribed time of seven calendar days, shall be ensured by the bank. Any instance for which a prior approval of the Reserve Bank is not required for any authorisation in terms of these Directions, the bank shall report such event / changes to the Reserve Bank within 15 calendar days (reporting format given in Annex III). Non-receipt of information / particulars within the prescribed time or furnishing of incorrect / partial information by the bank (including reporting on the CISBI portal) would be viewed seriously and the bank would be liable for penal action, including debarment from opening a new place of business for up to next three years.

48. Point of contact for application / submission of information: The point of contact for all matters related to this Direction shall be Regional Office of NABARD which, in turn, shall forward the applications to the Regional Office of the Reserve Bank, along with their comments and recommendations on the matter. An advance copy of the application has to be sent to the concerned Regional Office of the Reserve Bank.

Note: Banks shall submit their applications to the Reserve Bank using relevant application forms in the PRAVAAH portal (https://pravaah.rbi.org.in).

Chapter IV – Repeal and other Provisions

A. Repeal and saving

49. With the issue of these Directions, Reserve Bank of India (Rural Co-operative Banks – Branch Authorisation) Directions, 2025 dated November 28, 2025 stands repealed. The Directions, instructions, and guidelines repealed prior to the issuance of these Directions shall continue to remain repealed.

50. 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.

B. Application of other laws not barred

51. 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

52. 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.

(Manoranjan Padhy)
Chief General Manager