--- title: "RBI (Urban Co-operative Banks – Interest Rate on Deposits) Second Amendment Directions, 2026: Tighter Disclosure and Uniform Pricing" date: 2026-08-18 author: "King Stubb & Kasiva" url: https://ksandk.com/newsletter/ucb-deposit-interest-rate-disclosure/ --- # RBI (Urban Co-operative Banks – Interest Rate on Deposits) Second Amendment Directions, 2026: Tighter Disclosure and Uniform Pricing Posted On - 18 August, 2026 • By - King Stubb & Kasiva ## Introduction On July 30, 2026, the Reserve Bank of India (“RBI”) issued the **Reserve Bank of India (Urban Co-operative Banks – Interest Rate on Deposits) Second Amendment Directions, 2026** (RBI/2026-27/219, DOR.SOG(SPE).REC.181/13.03.00/2026-27), amending the Reserve Bank of India (Urban Co-operative Banks – Interest Rate on Deposits) Directions, 2025 dated November 28, 2025 (“Principal Directions”). The Amendment Directions have been issued in exercise of the powers conferred under Section 35A read with Section 56 of the Banking Regulation Act, 1949, with the RBI being satisfied that the amendments are necessary and expedient in the public interest. The amendments introduce enhanced requirements relating to the disclosure and uniformity of interest rates offered by Urban Co-operative Banks (“UCBs”), particularly in relation to **bulk deposits**. The changes are intended to strengthen transparency in deposit pricing while ensuring consistency in the rates offered to similarly placed depositors. ## Enhanced Transparency in Deposit Rate Disclosure The Amendment Directions substitute paragraph 6(3) of the Principal Directions and strengthen the transparency framework governing interest rates on deposits. Under the revised framework, the interest rates payable on deposits, including bulk deposits, must be in accordance with the rate schedule published in advance on the UCB’s website. In respect of bulk deposits, the applicable rates are required to be disclosed on the bank’s website by **10:00 a.m.** on each business day, with a grace period of 10 minutes, effectively requiring publication no later than 10:10 a.m. The prescribed disclosure window seeks to ensure that depositors and market participants have timely access to the applicable bulk-deposit rates and reduces the scope for rates to be communicated or altered on a discretionary basis after the relevant trading or business day has commenced. The requirement is particularly relevant for UCBs dealing with bulk deposits, where interest rates may have a more significant impact on funding decisions and pricing. ## Uniform and Non-Discriminatory Pricing The Amendment Directions also substitute paragraph 6(2) of the Principal Directions to strengthen the requirement of uniformity in deposit pricing. UCBs are required to offer the **same interest rate across all branches** and to all customers for deposits of similar amount accepted on the same date. The revised framework therefore seeks to prevent differential pricing between similarly placed depositors based solely on the branch through which the deposit is placed or the identity of the customer. The requirement brings greater consistency to deposit pricing practices and limits the scope for selective or preferential pricing of otherwise comparable deposits. ## Balancing Pricing Flexibility with Transparency The amendments reflect RBI’s objective of maintaining operational flexibility for UCBs in pricing deposits while strengthening transparency and consistency in the manner in which such rates are disclosed and applied. The revised framework does not prevent UCBs from responding to changing liquidity and funding conditions. Rather, it seeks to ensure that the flexibility available to banks in determining deposit rates operates within a transparent and non-discriminatory framework. The combination of advance disclosure and uniform pricing is therefore intended to provide depositors with greater clarity regarding the rates applicable to their deposits while ensuring consistency in the treatment of similarly placed customers. ## Applicability and Regulatory Context The Second Amendment Directions apply to Urban Co-operative Banks and will come into effect from **October 1, 2026**, providing UCBs with a transition period to update their interest-rate disclosure systems, internal pricing policies and branch-level communication mechanisms. The amendments form part of a broader set of parallel changes issued by the RBI on July 30, 2026 concerning interest rates on deposits across different categories of banks. The corresponding amendments cover commercial banks, small finance banks, regional rural banks, payments banks, local area banks and UCBs. While the broad objective across these amendments is greater transparency and consistency in deposit pricing, the detailed provisions differ depending on the category of regulated entity. Accordingly, UCBs should assess the requirements specifically applicable to them under the UCB Second Amendment Directions, 2026. ## Key Implications for UCBs The revised framework is likely to have practical implications for the manner in which UCBs determine, publish and communicate deposit rates. UCBs should, in particular: - review their existing interest-rate setting and approval mechanisms; - ensure that bulk-deposit rates are published within the prescribed daily disclosure window; - verify that rates displayed on their websites correspond with the rates actually offered to depositors; - review branch-level practices to ensure uniformity in rates offered for deposits of similar amounts accepted on the same date; and - align internal systems and branch communication protocols with the revised requirements before October 1, 2026. The compliance exercise will therefore extend beyond a review of written policies and may require coordination between treasury, technology, compliance and branch operations teams. ## Conclusion and Way Forward The UCB Second Amendment Directions, 2026 strengthen the transparency and consistency requirements governing deposit interest rates. In practical terms, a depositor placing a bulk deposit with a UCB should be able to access the applicable rate through the bank’s website within the prescribed disclosure window and should receive the same rate as another customer placing a comparable deposit through another branch on the same date, subject to the specific requirements of the revised framework. For UCBs, the transition period leading up to October 1, 2026 should be used to review and align their website disclosure processes, internal rate-setting workflows, branch-level pricing practices and communication protocols with the amended requirements. The amendments are likely to enhance transparency in the pricing of deposits while reducing the scope for inconsistent treatment of similarly placed depositors. UCBs should accordingly treat the October 1, 2026 commencement date as an important compliance milestone and undertake the necessary operational and policy-level changes in advance. *Last Updated on 19 August, 2026* Get King Stubb & Kasiva’s legal updates in your Google feed[![Add King Stubb & Kasiva as a preferred source on Google](https://ksandk.com/wp-content/uploads/google_preferred_source_badge_light_en@2x.png)](https://www.google.com/preferences/source?q=https://ksandk.com/) --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)