Now Reading: RBI to reopen urban cooperative bank licence applications
-
01
RBI to reopen urban cooperative bank licence applications
The Reserve Bank of India will resume issuing licences for urban cooperative banks on an on tap basis, after a pause of more than two decades. Governor Sanjay Malhotra said draft guidelines…
The Story in Brief
The Reserve Bank of India will resume issuing licences for urban cooperative banks on an on tap basis, after a pause of more than two decades. Governor Sanjay Malhotra said draft guidelines would soon be released for public consultation, following feedback on a January 2026 discussion paper.
The paper proposed a minimum capital requirement of Rs 300 crore, at least 10 years of operations for cooperative credit societies and five years of sound financial performance. Applicants would also need a CRAR of at least 12% and a net NPA ratio no higher than 3% at licensing. The Hindu reports that India has 1,457 urban cooperative banks.
The Indian Opinion
Claims that new licences will automatically revive cooperative banking are too optimistic. Equally, treating the long pause as proof that the sector cannot be trusted ignores stronger oversight and consolidation since 2020. The proposed capital, track record and asset-quality tests are a useful filter, but their value will depend on supervision after approval. How many applicants can meet the Rs 300 crore threshold without weakening governance?
Sources (2): timesofindia.indiatimes.com, thehindu.com
This story was synthesised by AI from the 2 sources linked above.
Updated: this story now draws on 2 sources.
