Now Reading: RBI to reopen licences for urban cooperative banks
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RBI to reopen licences for urban cooperative banks
The Reserve Bank of India will resume issuing fresh licences to urban cooperative banks on an on tap basis, after a pause of nearly two decades. RBI Governor Sanjay Malhotra said draft…
The Story in Brief
The Reserve Bank of India will resume issuing fresh licences to urban cooperative banks on an on tap basis, after a pause of nearly two decades. RBI Governor Sanjay Malhotra said draft guidelines will soon be released for public consultation, following feedback on a January 2026 discussion paper.
The proposed framework may require applicants to hold at least Rs 300 crore in capital, maintain a CRAR of 12% or more and keep net NPAs at 3% or below at licensing. Cooperative credit societies may also need 10 years of operations and five years of sound financial performance. RBI said it would favour stronger, larger societies and proceed cautiously.
The Indian Opinion
Claims that the move will automatically revive cooperative banking are premature. Equally, dismissing all cooperative lenders as unsafe ignores the proposed capital, governance and track-record tests. The real test will be whether new licensees maintain low bad loans after opening, not merely whether they meet the entry bar. RBI should publish approvals, rejections and subsequent asset-quality data so depositors can judge the results.
Source: timesofindia.indiatimes.com
This story was synthesised by AI from the source linked above.
