The Reserve Bank of India (RBI), on November 28, 2025, issued the Reserve Bank of India (Urban Co-operative Banks – Asset Liability Management) Directions, 2025.
The following has been stated:-
• Chapter III, which states, “Asset Liability Management Governance”
• ALM, among other functions, provides a dynamic framework for measuring, monitoring and managing liquidity, interest rate and foreign exchange (forex) risks. This involves assessment of various types of risks and altering balance sheet (assets and liabilities) items in a dynamic manner to manage risks.
• These Directions shall serve as a benchmark. A UCB that has already implemented more sophisticated systems may continue using them. However, the UCB shall fine-tune its existing system to ensure compliance with the requirements set out in these Directions. A UCB shall also review its current MIS and implement necessary enhancements to meet the prescriptions of these Directions. Once the ALM System is stabilised and the UCB has gained sufficient experience, it shall prepare to transition to more sophisticated techniques for interest rate risk management such as Duration Gap Analysis, Simulation and Value at Risk
[Notification no. RBI/DOR/2025-26/285 DOR.LRG.No.204/13-10-006/2025-26]
