Urban Cooperative Banks
Explained: Why RBI wants to restart UCB licensing after a two-decade pause
After a 20-year freeze, the RBI is preparing to issue new UCB licences as reforms, stronger oversight and improving financial health reshape the cooperative banking sector
 "Explained: Why RBI wants to restart UCB licensing after a two-decade pause")
RBI to issue new draft norms for urban cooperative bank licensing shortly
The proposed framework sets capital, asset quality and governance criteria for cooperative credit societies seeking to become urban cooperative banks after a two-decade pause
 "RBI to issue new draft norms for urban cooperative bank licensing shortly")
Best of BS Opinion: Direction and delivery are not the same
From AI and EVs to cooperative banks and data governance, India's transformation will depend less on ambition and more on effective institutions and execution
 "Best of BS Opinion: Direction and delivery are not the same")
Renewing the cooperative promise
UCBs need to combine their cooperative values with contemporary capabilities
RBI proposes to raise unsecured loans to 20% of total for urban co-op banks
RBI has proposed raising the unsecured loan cap for urban co-operative banks to 20 per cent of advances, revising norms on unsecured lending and housing loan tenors
 "RBI proposes to raise unsecured loans to 20% of total for urban co-op banks")
At UCB meet, RBI stresses asset quality oversight, governance standards
RBI Governor Sanjay Malhotra urges urban co-operative banks to strengthen governance, underwriting and asset quality, reiterating their role in financial inclusion
 "At UCB meet, RBI stresses asset quality oversight, governance standards")
RBI looks to resume UCB licences after 22 yrs; moots ₹300 cr min capital
CAR not less than 12%; net NPA not above 3%
 "RBI looks to resume UCB licences after 22 yrs; moots ₹300 cr min capital")
RBI proposes 3-year break for co-op banks' directors after 10 yrs on board
Banking Regulation (Amendment) Act has prescribed a ceiling on the continuous tenure of directors on both state and central co-operative banks and urban co-operative banks, raising it from 8 to 10 yrs
 "RBI proposes 3-year break for co-op banks' directors after 10 yrs on board")
Number of UCBs declines to 1,457 in FY25 as RBI consolidation continues
India's urban co-operative banks fell to 1,457 at end-March 2025 from 1,926 in 2004, as RBI consolidation continued via mergers, closures and licence cancellations
RBI's new guidelines may slow expansion of urban cooperative banks
Officials also said the new rules would raise compliance costs by over 20 per cent
 "RBI's new guidelines may slow expansion of urban cooperative banks")
New national policy on cooperatives calls for apex bank for the sector
India has over 800,000 cooperative societies, comprising around 200,000 cooperatives and 600,000 non-credit cooperatives
 "New national policy on cooperatives calls for apex bank for the sector")
UCB directors must probe management to boost governance: RBI's Swaminathan
RBI advises UCB directors to ask tough questions to senior management to ensure ethical, transparent, and prudent operations, aiming to prevent distress in the banks
 "UCB directors must probe management to boost governance: RBI's Swaminathan")
RBI's revised PSL norms: HDFC Bank, Federal Bank, IndusInd Bank to benefit
Augurs well for banks with relatively lower organic PSL generation
 "RBI's revised PSL norms: HDFC Bank, Federal Bank, IndusInd Bank to benefit")
UCBs must be mindful of responsibilities: RBI Governor Sanjay Malhotra
He said that the UCBs must maintain high standards of customer service to build and retain trust
 "UCBs must be mindful of responsibilities: RBI Governor Sanjay Malhotra")
Urban co-op banks must be mindful of trust reposed by depositors: RBI Guv
RBI Governor Sanjay Malhotra advised the UCBs to ensure that they remain operationally resilient, including against IT and cyber-related risks
 "Urban co-op banks must be mindful of trust reposed by depositors: RBI Guv")
RBI raises UCBs' small-value loans per borrower cap to Rs 3 crore
According to RBI norms, UCBs are required to have at least 50 per cent of their aggregate loans and advances consisting of small value loans by March 31, 2026
 "RBI raises UCBs' small-value loans per borrower cap to Rs 3 crore")
Will return money of Urban Cooperative Bank's depositors, says Odisha CM
He said the government has decided to take up 54 programmes under the cooperative sector
 "Will return money of Urban Cooperative Bank's depositors, says Odisha CM")
Up to 65 weak Urban Cooperative Banks to exit turnaround regime by March
PCA will replace the existing SAF from the beginning of the new financial year - Apr 2025. During FY24, 122 UCBs across the country came out of SAF. The number of UCBs stood at 1,470 at end of Mar '25
 "Up to 65 weak Urban Cooperative Banks to exit turnaround regime by March")
Norms for new capital instruments for Urban Cooperative Banks on anvil
Shaktikanta Das stated that to provide more flexibility, avenues for UCBs to raise capital, a discussion paper on capital-raising avenues will be issued for feedback from stakeholders
 "Norms for new capital instruments for Urban Cooperative Banks on anvil")
RBI pulls up UCBs creating Dividend Equalisation Fund for payments
Gives one time permission to transfer corpus to reserves
 "RBI pulls up UCBs creating Dividend Equalisation Fund for payments")