The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Rural Co-operative Banks – Concentration Risk Management) Directions, 2025.
The following has been stated namely: -
• It sets out new norms to limit concentration risks in rural co-operative banks (RCBs). These directions apply to State Co-operative Banks and Central Cooperative Banks, defining “exposure” (funded and non-funded) and “lendable resources,” and requiring them to have a Board-approved policy on sanctioning loans to individuals and commercial real estate (CRE-RH).
• The exposure norms classify limits by NABARD inspection ratings, bounding individual exposures and sectoral exposures as percentages of capital fund or lendable resources. Housing loans to individuals have capped exposure depending on the bank’s size.
• CRE-RH financing is permitted only within 5 % of total assets, with conditions on permissible commercial component.
• RCBs shall submit quarterly CMA-1 returns to NABARD via the ENSURE portal, reporting all exposure violations.
• Existing concentration risk guidelines will be repealed once these take effect, though prior actions/restraints remain valid.
[Notification no. - RBI/DOR/2025-26/306 DOR.CRE.REC.225/07-03-006/2025-26]
