The Reserve Bank of India (Rural Co-operative Banks – Miscellaneous) Supervisory
Directions, 2026, consolidate supervisory requirements relating to the Fair Practices
Code for Lenders applicable to State Co-operative Banks (StCBs) and Central Co-
operative Banks (CCBs). Issued under Section 35A read with Section 56 of the
Banking Regulation Act, 1949, the Directions came into effect immediately and aim
to promote fairness, transparency, and customer protection in lending practices.
The Directions require banks to ensure interest is charged only from the actual date
of loan disbursement, calculate EMIs on the amount actually disbursed,
communicate any changes in the amortisation schedule, charge interest only for
the actual loan outstanding period, and avoid collecting advance instalments while
charging interest on the full sanctioned amount. Banks are also encouraged to use
online account transfers instead of cheques for loan disbursement. The Directions
repeal earlier instructions on these matters while preserving actions taken under the
previous framework.
