The Reserve Bank of India (RBI), on July 31, 2026, issued the Reserve Bank of India (Regional Rural Banks – Miscellaneous) Supervisory Directions, 2026, prescribing supervisory requirements for Regional Rural Banks (RRBs). The Directions came into force with immediate effect and consolidate provisions relating to fair lending practices, charging of interest, and frauds in loans and advances, while repealing the earlier directions and guidelines on these subjects.
The Directions require RRBs to review and rectify unfair practices in charging interest, including charging interest from the date of actual loan disbursement instead of the sanction date, levying EMIs only on the actual disbursed amount, communicating changes in the amortisation schedule arising from part disbursements, charging interest only for the period the loan remains outstanding, and avoiding collection of advance instalments while charging interest on the full loan amount. RRBs have also been encouraged to use online account transfers instead of cheques for loan disbursements to enhance transparency and customer fairness.
Further, the Directions provide that where a prima facie case of fraud is established against loan-dealing officials, the concerned RRB shall initiate appropriate action for their inclusion in the list of officers with doubtful integrity, in consultation with the Central Bureau of Investigation (CBI) and in accordance with Central Vigilance Commission (CVC) guidelines.
[Notification No. RBI/DoS/2026-27/455]
