The Reserve Bank of India (RBI) today issued draft amendment directions to review lending norms for Urban Co-operative Banks.
The proposals were announced as part of the Statement on Developmental and Regulatory Policies dated 6th February, 2026. The draft directions have been issued by the RBI’s Department of Regulation for public comments.
The draft amendments cover concentration risk management, credit facilities, and financial statements, presentation and disclosures of Urban Co-operative Banks.
The RBI has proposed to rationalise the definition of unsecured advances. It has also proposed to raise the aggregate ceiling for unsecured loans by UCBs to 20 per cent of total advances, from the existing limit of 10 percent of total assets.
The lending limit to nominal members for purchase of consumer durables is proposed to be increased to two lakh fifty thousand rupees per borrower.
The RBI has also proposed deregulation of tenor and moratorium norms for housing loans for Tier Three and Tier Four UCBs. Comments and feedback on the draft directions can be submitted till 4th March 2026 through the RBI’s Connect 2 Regulate platform or by email.
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