Daijiworld Media Network - Mumbai

Mumbai, Feb 10: The Reserve Bank of India (RBI) on Tuesday issued draft amendment directions to review and update lending norms for Urban Co-operative Banks (UCBs).

The proposals were announced as part of the Statement on Developmental and Regulatory Policies dated February 6, 2026, and have been issued by the RBI’s Department of Regulation for public consultation.

According to the draft, the amendments cover key areas including concentration risk management, credit facilities, and the presentation and disclosure of financial statements of Urban Co-operative Banks.

The RBI has proposed to rationalise the definition of unsecured advances and increase the aggregate ceiling for unsecured loans by UCBs to 20 per cent of total advances, from the existing limit of 10 per cent of total assets.

The central bank has also suggested raising the lending limit to nominal members for the purchase of consumer durables to Rs 2.5 lakh per borrower.

Further, the draft proposes deregulation of tenor and moratorium norms for housing loans for Tier III and Tier IV Urban Co-operative Banks, aimed at providing greater operational flexibility.

The RBI has invited comments and feedback on the draft directions, which can be submitted until March 4, 2026, through the RBI’s Connect 2 Regulate platform or via email.