The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Local Area Banks – Supervisory Returns) Directions, 2026, with immediate effect under the Banking Regulation Act, 1949 and the Reserve Bank of India Act, 1934. The Directions apply to all Local Area Banks (LABs) and establish a comprehensive framework for the governance, preparation, submission, and monitoring of supervisory returns to the RBI.
The Directions require the Board and Senior Management to establish a robust governance framework for supervisory reporting by ensuring effective data quality management, risk data aggregation, IT infrastructure, and reporting integrity. Banks are required to maintain accurate and complete data architecture, document reporting practices, validate data through appropriate IT and reporting expertise, strengthen automation in return generation, and ensure reporting systems remain functional even during periods of stress or crisis.
Further, the Directions prescribe detailed operational guidelines for filing supervisory returns, mandating submission through RBI's online reporting portals, while specifying the list of applicable returns, reporting timelines, exceptions, penalties for non-compliance, and other reporting requirements. The Directions also repeal the earlier instructions relating to supervisory returns while preserving actions taken under the previous framework, thereby standardising supervisory reporting requirements for Local Area Banks.
[Notification No. RBI/DoS/2026-27/449]
