The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Regional Rural Banks - Interest Rates on Advances) Directions, 2025.
The following has been stated: -
•The RBI (Regional Rural Banks – Interest Rates on Advances) Directions, 2025, set guidelines for RRBs on lending interest rates, effective from their publication on the RBI website.
•Banks must avoid usurious rates, charge interest on advances at monthly rests (except certain agricultural loans), and follow Board-approved procedures for small-value loans.
•Microfinance loans require a documented interest rate policy with clear components, ceilings, and supervisory oversight.
•These Directions repeal previous interest rate instructions for RRBs but preserve actions taken under them. RBI retains the authority to clarify or interpret provisions, which are final and binding.
•These directions shall come into effect from November 28, 2025.
[Notification No.:RBI/DOR/2025-26/259 DOR.CRE.REC.178./13.03.000/2025-26]
