The Reserve Bank of India (RBI), on February 10, 2026, issued the Draft Reserve Bank of India (Urban Co-operative Banks – Credit Facilities) – Amendment Directions, 2026.
The following has been stated namely: -
• In ‘Chapter VIII – Housing Finance’ of the Directions, the following modifications shall be effected:-
(i) Paragraph 116 shall be substituted with the following paragraph: 116. Tenor of housing loans:
(1) For Tier 1 and Tier 2 UCBs, the tenor of housing loans shall not exceed 20 years, including the moratorium period.
(2) Tier 3 and Tier 4 UCBs are permitted to determine the tenor of housing loans, including the moratorium period, as per their Board-approved policies.
(3) The credit policy of a UCB should, at a minimum, specify risk management and pricing strategies for housing loans, considering inter alia the life expectancy of the borrower and the relatively longer duration of these exposures.
• The above amendments shall come into force from October 01, 2026.
[Notification no. RBI/2025-26/ DOR.CRE.REC./07-01-005/2025-26]
