RBI may bring back urban cooperative bank licenses after 22 years

Business Jan 13, 2026

The RBI is thinking about allowing new Urban Cooperative Banks (UCBs) to open again, ending a pause that started in 2004 over concerns about smaller banks' stability.
They're asking for public feedback on when to restart and what rules should apply, with a deadline of February 13, 2026.

Why does it matter?

If this goes through, only big and well-run cooperative societies—those with at least ₹300 crore in capital, a solid track record, and healthy finances—will qualify.
The RBI wants these new UCBs to follow the same rules as commercial banks to boost trust and financial inclusion.
This move could help make banking safer and more accessible for communities in smaller cities, especially in smaller cities.