Archive · 14 Jan 2026
RBI Proposes Licensing Large Co-operative Credit Societies as UCBs
The Reserve Bank of India (RBI) is thinking about giving licenses to big co-operative credit societies that have been working for at least 10 years and have a good financial record for at least 5 years.
These societies could become urban co-operative banks (UCBs).
The RBI wants to do this because smaller UCBs have often had problems, and bigger societies might be more stable.
They also want to make sure these banks have good leaders and rules, similar to regular banks.
The RBI is asking for people's opinions on this idea and wants to make sure these new banks have enough money to start.
Right now, there are 1,457 UCBs in India with a lot of assets and deposits.
The RBI is also asking for feedback on some rules for other types of financial companies.
RBI proposes licensing large co-operative credit societies with 10+ years of active operations and 5+ years of good financial track record as UCBs.
Licensing of UCBs was paused in 2004 due to financial instability of newly licensed banks.
RBI recommends higher minimum capital requirement of ₹300 crore for co-operative credit societies.
Eligible societies must demonstrate a positive trend in operating and financial parameters over the previous five years.
As of March 31, 2025, there are 1,457 UCBs in India with total aggregate assets of ₹7.38 lakh crore and total deposits of ₹5.84 lakh crore.
- Who
- Reserve Bank of India (RBI)
- What
- Proposal to license large co-operative credit societies as urban co-operative banks (UCBs)
- When
- Discussion Paper released on January 13, 2026; comments due by February 13, 2026
- Where
- India
- Why
- To mitigate risks and ensure sound governance and management practices in UCBs
- Minimum Capital Requirement
- ₹300 crore
- Minimum Active Operations
- 10 years
- Minimum Financial Track Record
- 5 years
- Assessed CRAR
- Not less than 12%
- Net NPA Ratio
- Not more than 3%
- Total UCBs as of March 31, 2025
- 1,457
- Total Aggregate Assets of UCBs
- ₹7.38 lakh crore
- Total Deposits of UCBs
- ₹5.84 lakh crore
- Asset Quality (GNPA Ratio)
- 6.2%
- Net NPA
- 0.7%
- Provisioning Coverage Ratio
- 90.1%
Sources
Multi-state co-op credit societies may make the cut for getting Urban Co-op Bank license: RBI Discussion Paper
RBI seeks public feedback on NBFC, ARC capital rule tweaks
RBI proposes reopening urban co-operative banks’ licenses; favours large credit societies
