“On the premise of the suggestions acquired on the dialogue paper on licensing of UCBs, we’re issuing draft pointers for resuming licensing of UCBs,” central financial institution Governor Sanjay Malhotra stated on Wednesday.
It has been 22 years because the RBI put the licensing of UCBs on maintain after discovering that numerous newly licensed UCBs had grow to be financially unsound inside a brief interval.
The choice to look at the professionals and cons of issuing new UCB licences was first introduced within the financial coverage assertion on October 1, 2025.
The RBI noticed that the working setting had modified since 2004, when UCB licensing was paused.
“The UCB sector has remodeled considerably since then,” the RBI stated on the time whereas publishing a dialogue paper on licensing new UCBs.
A cooperative society, whether or not registered beneath any State Cooperative Societies Act or beneath the Multi-State Cooperative Societies Act, is required to acquire a licence beneath Part 22, learn with Part 56, of the Banking Regulation Act, 1949, from the RBI to hold out any banking enterprise.UCBs had been introduced beneath the ambit of the RBI in 1966 via an modification to the Banking Regulation Act, 1949. A cooperative society that has been granted a banking licence as a major cooperative financial institution is often known as a UCB. UCBs kind the biggest cohort of banks by quantity regulated by the RBI.
Between 1993 and 2001, the RBI issued 823 UCB licences. As of March 31, 2025, the variety of UCBs stood at 1,457, official information confirmed.
