RBI’s 2026 Amendments to CRR and SLR Directions for Urban Co-operative Banks: A Practical Guide

The Reserve Bank of India has issued the Reserve Bank of India (Urban Co-operative Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Amendment Directions, 2026 on January 22, 2026. These Directions take effect immediately and fine-tune the existing regulatory framework applicable to Urban Co-operative Banks (UCBs) relating to Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).

These amendments are primarily technical in nature, intended to bring the 2025 Directions in line with recent statutory changes, refresh institutional references, and refine the reporting formats that UCBs must use for compliance.

This article explains the background, the precise amendments notified, and their practical implications for UCBs in a clear, structured manner.

1.1 Earlier Directions for UCBs

The base framework being modified is the Reserve Bank of India (Urban Co-operative Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025 issued on November 28, 2025. Those Directions laid down:

  • The manner in which UCBs must maintain CRR with the Reserve Bank
  • The composition and maintenance norms for SLR
  • Reporting formats, including Forms and Annexures (Annex I, II, III, etc.) for regular compliance submissions

The 2026 Directions do not replace the 2025 Directions but selectively amend them.

1.2 Legislative Changes Triggering the Amendments

The Reserve Bank’s latest move is driven by the following legislative developments:

  1. Banking Laws (Amendment) Act, 2025
  2. Banking Regulation (Co-operative Societies) Amendment Rules, 2025
  3. Reserve Bank of India Scheduled Banks’ (Amendment) Regulations 2025

These instruments were published in the Gazette of India on December 10, 2025 and January 15, 2026, thereby necessitating alignment of the RBI’s existing Directions with the updated legal framework.

1.3 Statutory Powers Invoked by RBI

To issue the Amendment Directions, the Reserve Bank has relied on the following provisions:

  • Section 35A of the Banking Regulation Act, 1949
  • Section 42 of the Reserve Bank of India Act, 1934
  • Sections 18 and 24, read with Section 56 (AACS), of the Banking Regulation Act, 1949

These provisions, along with other enabling laws, empower RBI to prescribe, modify, and clarify regulatory norms in the public interest, including CRR and SLR requirements.

RBI has specifically recorded that it is “satisfied that it is necessary and expedient in the public interest” to issue these Amendment Directions.

2. Scope and Effective Date of the 2026 Directions

2.1 Title and Nature of the Amendments

The instrument is titled:

Reserve Bank of India (Urban Co-operative Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Amendment Directions, 2026

These Directions are amendments to the 2025 Directions, not a fresh standalone code. They should be read together with the 2025 framework.

2.2 Commencement

The Directions are stated to come into force with immediate effect from January 22, 2026.
UCBs are therefore required to implement the changes in:

  • CRR/SLR reporting formats
  • Terminology used in returns
  • Classification of specific balances and deposits

without any transitional grace period.

3. Overview of Key Changes Introduced

Broadly, the amendments cover the following areas:

  • Inclusion of “other development financial institutions” in relevant provisions
  • Refinement of reporting language for cash balances
  • Updating of financial institution names in Annex I (Form B)
  • Insertion and modification of entries in Annex II (Form I) and Annex III
  • Clarification of references to RBI-notified percentages in certain SLR-related items
  • Introduction of a new reporting line for amounts placed under the Standing Deposit Facility Scheme

Each of these is explained in detail below.

4.