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RBI/DoR/2026-27/128 June 15, 2026 Reserve Bank of India (Regional Rural Banks – Undertaking of Financial Services) Second Amendment Directions, 2026 In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, the Reserve Bank being satisfied that it is necessary and expedient in the public interest to do so, hereby, amends the directions issued vide Reserve Bank of India (Regional Rural Banks – Undertaking of Financial Services) Directions, 2025 (“the Master Direction”). 2. The extant regulations governing agency business and referral services have been reviewed and, accordingly, the Master Direction shall be amended. The revised regulatory framework is provided below. Further, the regulatory instructions on customer service and conduct aspects shall be consolidated in the Reserve Bank of India (Regional Rural Banks – Responsible Business Conduct) Directions, 2025. 3. Short Title and Commencement (1) These Directions shall be called the Reserve Bank of India (Regional Rural Banks – Undertaking of Financial Services) Second Amendment Directions, 2026. (2) These Directions shall come into effect on January 01, 2027. 4. These Amendment Directions shall modify the Reserve Bank of India (Regional Rural Banks – Undertaking of Financial Services) Directions, 2025 as under: (i) In paragraph 4 of the Master Direction, a) Sub-para (1) shall be substituted by the following, namely: – “(1) ‘Agency Business’ means an arrangement under which a bank acts as an agent of a third-party product or service provider (TPPSP), without risk participation, to facilitate the sale of the latter’s financial products or services (e.g., insurance, mutual fund, pension fund, etc.) to its own customers. The activities covered under agency business arrangements may inter-alia include marketing, sales, promotion, initial point of contact for redressal of grievance and other after-sale services related to the product or service. Note: RRBs can only undertake agency businesses as permitted in Chapter III of these directions”. b) the existing sub-para (1) in the Master Direction, which defines Debtor Company, shall be renumbered as (1A). c) Sub-para (6) shall be substituted by the following, namely: – “(6) Referral Services’ means an arrangement under which a RRB may refer its customers to a TPPSP by making available information about the financial products or services offered by the TPPSP. RRBs may undertake only such third-party product or services under Referral route where continued customer interactions such as distribution, grievance redressal, post sales services are not undertaken. Note: RRBs can only undertake referral business as permitted in Chapter III of these directions”. d) after sub-para (6), following sub-paras shall be inserted, namely :- “(7) ‘Regulated financial products and services’ means financial products and services which fall under the regulatory framework of any of the financial sector regulators viz. Reserve Bank of India, Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority of India (IRDAI), Pension Fund Regulatory and Development Authority (PFRDA) and Overseas Regulatory Authorities including IFSCA. (8) ‘Third-party Product and Service (TPPS)’ means a product or service as defined under Reserve Bank of India (Regional Rural Banks – Responsible Business Conduct) Directions, 2025. (9) ‘Third-party Product and Service Provider (TPPSP)’ means an entity which has entered into agency business or referral arrangement with a bank to offer its product or service (Third-party Product or Service (TPPS)) to a customer of the concerned bank”. (ii) For paragraph 18 of the Master Direction, the following shall be substituted, namely:- “18. An RRB is permitted to undertake the marketing of units of Mutual Funds as agent. RRB may, with the approval of their Board, enter into agreement with Mutual Funds for marketing their units, subject to the following terms and conditions: (1) An RRB shall comply with the SEBI guidelines / regulations, including its code of conduct, for distribution of mutual fund products. (2) An RRB shall ensure that it is in full compliance with the instructions on Reserve Bank of India (Regional Rural Banks – Responsible Business Conduct) Directions, 2025. (3) The business shall be undertaken on fee basis without any risk participation. This shall be explicitly disclosed upfront to the customers. (4) An RRB shall put in place adequate and effective control mechanisms. (5) It shall be ensured that Mutual Funds whose products are being sold have robust customer grievance redressal arrangements in place. The bank may facilitate the redressal of grievances. (6) Only such mutual fund products which are covered under the arrangement shall be listed or displayed on websites or any other digital banking channels offered by the RRBs”. (iii) For paragraph 20 of the Master Direction, the following shall be substituted, namely:- “20. An RRB may take up corporate agency business for distribution of all types of insurance products, including health and animal insurance, subject to the following conditions: (1) An RRB should comply with the Insurance Regulatory and Development Authority of India (IRDAI) regulations for acting as ‘composite corporate agent’. (2) An RRB shall ensure that it is in full compliance with the instructions on Reserve Bank of India (Regional Rural Banks – Responsible Business Conduct) Directions, 2025. (3) The business shall be undertaken on fee basis without any risk participation. This shall be explicitly disclosed upfront to the customers. (4) It shall be ensured that insurance companies whose products are being sold have robust customer grievance redressal arrangements in place. The bank may facilitate the redressal of grievances. (5) Only such insurance products which are covered under the arrangement shall be listed or displayed on websites or any other digital banking channels offered by the RRBs”. (iv) In paragraph 23 of the Master Direction, sub-para (1) shall be substituted by the following, namely:- “(1) An RRB shall comply with the instructions on Reserve Bank of India (Regional Rural Banks – Responsible Business Conduct) Directions, 2025 and relevant IRDAI regulations applicable to referral arrangements with insurance companies”. (v) In paragraph 23 of the Master Direction, sub-paras (2) and (6) shall be omitted. (vi) Paragraph 25 under title ‘Disclosure of Commission and Fees to Customers’ of the Master Direction shall be omitted. (Manoranjan Padhy) |
