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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Reserve Bank of India (Urban Co-operative Banks - Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025

28-Nov-2025 | RBI/DOR/2025-26/288 DOR.FIN.REC.No.207/20-16-003/2025-26

RBI has issued RBI (Urban Co-operative Banks - Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025 effective from 28th November 2025.

Key Highlights:
1. Applicability - All Urban Co-operative Banks (UCBs), meaning Primary Co-operative Banks as defined under the Banking Regulation Act.
2. Board-Approved Policy - UCBs must prepare a Board-approved policy covering notices, reviews, end-use checks, photo publication, and forensic audit thresholds.
3. Criteria for Wilful Default - Wilful default must be intentional and supported by clear evidence examined by an Identification Committee.
4. Role of the Review Committee - The Review Committee must issue the final, reasoned order, and legal representation in the process is not allowed. UCBs must reassess NPAs of ?25 lakh and above for wilful default and complete classification within six months.
5. Penal and Restrictive Actions - Actions may include criminal proceedings, publishing photographs, blocking fresh credit, restricting new ventures, and limiting restructuring.
6. Mandatory Reporting to Credit Bureaus - UCBs must report wilful and large defaulters monthly to credit information companies and promptly update any removals.


For more information, please refer to the attached document.



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