Babai Rural Municipality (Nepali :बबई गाउँपालिका) is a Gaunpalika in Dang District in Lumbini Province of Nepal.

On 12 March 2017, the government of Nepal implemented a new local administrative structure, with the implementation of the new local administrative structure, VDCs have been replaced with municipal and Village Councils.

[3] Babai RM is surrounded by Shantinagar Rural Municipality and Dangisharan Rural Municipality in the east, Banke district in the west, Salyan district in the north and in south there is Dangisharan Rural Municipality and Banke district.

At the time of the 2011 Nepal census, Babai Rural Municipality had a population of 27,469.

[4] In terms of ethnicity/caste, 49.5% were Chhetri, 18.9% Magar, 12.4% Kami, 4.1% Tharu, 3.9% Hill Brahmin, 2.6% Damai/Dholi, 2.6% Sanyasi/Dasnami, 1.8% Sarki, 1.4% Kumal, 0.7% Thakuri, 0.5% Bote, 0.4% Gaine, 0.3% Badi, 0.3% Majhi, 0.1% Gharti/Bhujel, 0.1% Gurung, 0.1% Musalman, 0.1% Newar, 0.1% other Terai and 0.1% others.