The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Rural Co-operative Banks – Voluntary Amalgamation) Directions, 2025.
The following has been stated namely: -
• It establishes a framework for the voluntary merger of rural cooperative banks—namely, State Co-operative Banks (StCBs) and District Central Co-operative Banks (DCCBs). The Directions require that each scheme of amalgamation be approved by at least two-thirds of shareholders in both number and value, followed by the RBI’s in-principle and final approval (in consultation with NABARD).
• Key eligibility requirements include a permissible post-amalgamation CRAR above the regulatory minimum, GNPA less than 7%, net NPA under 5%, healthy governance and management practices, and compliance with due diligence norms, including valuation of assets, liabilities, and pension obligations.
• Post-amalgamation, the acquiring entity inherits all assets and liabilities of the merged banks, shall maintain its existing banking licence, apply for branch conversion, and ensure full IT-system integration, while depositors shall be given sufficient advance notice if interest rates differ.
• The Directions also repeal prior guidelines on voluntary amalgamation and clarify that the new Directions are supplementary to all existing laws.
[Notification no. - RBI/DoR/2025-26/295 DoR.HOL.REC.214/16-13-100/2025-26]
