RBI may bring back urban cooperative bank licenses after 2 decades
After a 22-year pause, the Reserve Bank of India (RBI) is thinking about reopening the doors for new urban cooperative banks (UCBs).
The RBI just dropped a discussion paper on this and wants everyone's feedback soon.
They hit pause back in 2004 because several UCBs ran into financial trouble.
Why should you care?
If you're interested in how money flows in Indian cities, this could shake things up.
The RBI wants only financially strong societies to apply—think minimum ₹300 crore capital, active operations for at least 10 years and a good financial track record for at least 5 years, and low bad loans.
They're also leaning toward multi-state societies for better reach.
Even so, the number of UCBs has dropped sharply—from over 2,100 in 2003 to just 1,457 now—with many still under restrictions due to past issues.
This move could mean more reliable banking options for small towns and cities if done right.