RBI’s 2026 Amendment for Rural Cooperative Banks: Disaster-Time Banking and Customer Relief

The Reserve Bank of India has notified the Reserve Bank of India (Rural Cooperative Banks – Responsible Business Conduct) Amendment Directions, 2026, introducing a structured framework to keep essential banking services running in areas officially declared as affected by a calamity.

These Amendment Directions, issued under the Banking Regulation Act, 1949, insert a new Part D in Chapter V on “Financial Inclusion and Accessibility”, laying down clear expectations for how Rural Cooperative Banks should function when floods, earthquakes, cyclones, or similar disasters disrupt normal operations.

The new provisions are effective from July 1, 2026 and are aimed at:

  • Ensuring continuity of basic banking services in disaster zones
  • Facilitating access to cash and account operations for affected persons
  • Relaxing certain operational and documentation norms in genuine hardship cases
  • Enabling banks to offer temporary financial relief to distressed customers

The Amendment Directions are grounded in the Reserve Bank’s powers under:

  • Section 20 of the Banking Regulation Act, 1949
  • Section 21 of the Banking Regulation Act, 1949
  • Section 35A read with Section 56 of the Banking Regulation Act, 1949

Exercising these powers, the Reserve Bank has modified its existing Directions applicable to Rural Cooperative Banks, after earlier issuing the Reserve Bank of India (Rural Cooperative Banks – Resolution of Stressed Assets) Amendment Directions, 2026 on April 29, 2026.

The latest Amendment Directions specifically focus on responsible business conduct and financial inclusion in the context of declared calamities, particularly through a new segment titled “Banking services in case of declaration of calamity”.

Note: The new framework applies only when an area has been formally declared as affected by a calamity by the competent authorities.

Insertion of New Part D in Chapter V – Financial Inclusion and Accessibility

The Directions insert a new Part D in Chapter V, introducing clauses 102A to 102D. Each of these provisions prescribes a key operational or customer-care requirement for Rural Cooperative Banks during calamities.

Overview of New Clauses 102A to 102D

The new clauses cover four crucial dimensions:

  1. Operational flexibility for branches (102A)
  2. Restoration and alternatives for ATM services (102B)
  3. Opening of “small accounts” under relaxed KYC for displaced persons (102C)
  4. Optional relief on banking charges for affected customers (102D)

Collectively, these directions seek to align Rural Cooperative Banks with a pro-customer, inclusion-driven approach in times of crisis.

Clause 102A – Operating from Temporary Premises and Alternative Service Points

Temporary relocation of calamity-affected branches

Under clause 102A, where a branch of a Rural Cooperative Bank is impacted by a calamity, the bank is allowed to operate that branch from temporary premises. This is particularly relevant in situations such as:

  • Branch building damage or inaccessibility
  • Flooded or structurally unsafe premises
  • Evacuation orders in the locality

The key conditions are:

  • The bank can shift operations to a temporary location after informing the concerned Regional Office of RBI.
  • Such temporary arrangement is initially permissible for up to 30 days without prior approval, subject to intimation.

Extension beyond 30 days – need for RBI approval

If the bank needs to continue operating from the temporary premises beyond 30 days, it must:

  • Seek and obtain specific approval from the respective Regional Office of RBI.

This ensures that while immediate flexibility is available to the bank, prolonged deviations from authorised premises are monitored and controlled by the regulator.

Alternative modes to serve affected areas

Clause 102A further obligates banks to ensure that services reach the affected population, not merely by relocating branches but also through supplementary channels. Banks may:

  • Set up satellite offices closer to relief camps or heavily affected localities
  • Open extension counters within accessible public buildings or community centres
  • Deploy mobile banking facilities, such as vans or portable kiosks, to cover scattered or remote affected pockets