The Reserve Bank of India (RBI), on November 28, 2025, issued the Reserve Bank of India (Urban Co-operative Banks – Prudential Norms on Declaration of Dividends) Directions, 2025.
The following has been stated:-
• Interpretations:- For the purpose of giving effect to the provisions of these Directions or in order to remove any difficulties in the application or interpretation of the provisions of these Directions, the Reserve Bank̥ may, if it considers necessary, issue necessary clarifications in respect of any matter covered herein and the interpretation of any provision of these Directions given by the Reserve Bank shall be final and binding.
• The prudential treatment of reversal of excess provision, dividend payment by a bank on reversal of such provisions and unrealized profits arising on account of transfer of loans and Security Receipts guaranteed by the Government of India shall be guided by the instructions contained in Reserve Bank of India (Urban Co-operative Banks – Transfer and Distribution of Credit Risk) Directions, 2025.
• A UCB complying with all the parameters specified in paragraph 6 except for the NNPA ratio [as prescribed under paragraph 6(ii) above], and desirous of declaring dividend shall approach the respective Regional Office of the Reserve Bank for permission for declaring dividend provided the NNPA ratio is less than ten per cent.
[Notification no. RBI/DOR/2025-26/290 DOR.ACC.REC.209/ 21-02-067/2025-26]
