The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Regional Rural Banks – Undertaking of Financial Services) Directions, 2025.
The following has been stated: -
•The RBI (Regional Rural Banks – Undertaking of Financial Services) Directions, 2025 regulate RRBs’ participation in financial services like mutual funds, insurance, and merchant acquisition.
•RRBs can market mutual fund units and act as corporate agents or referral partners for insurance without risk participation, ensuring customer choice and transparency.
•They may invest in Alternative Investment Funds (AIFs) with limits not exceeding 10% of a scheme’s corpus individually and 20% collectively by all regulated entities.
•RRBs are permitted to undertake merchant acquiring business using Aadhaar Pay (BHIM app) and POS terminals, subject to IT security, capital adequacy, and governance norms.
•The Directions replace all prior guidelines on RRB financial services and take full effect from January 01, 2026, with the RBI empowered to issue clarifications or exemptions.
•These directions shall come into effect from November 28, 2025.
[Notification No.: RBI/DOR/2025-26/248 DoR.AUT.REC.No.167/24-01-041/2025-26]
