RBI to resume 'on tap' licensing for Urban Cooperative Banks after two decades
The Reserve Bank of India (RBI) is set to resume "on tap" licensing for Urban Cooperative Banks (UCBs) after a pause of over two decades, aiming to foster a vibrant cooperative sector. RBI Governor Sanjay Malhotra announced that draft guidelines for this would be issued shortly for stakeholder consultation, following feedback on a discussion paper published in January 2026. Additionally, the RBI plans to review guidelines on concentration risk management for rural cooperative banks (RCBs) and rationalize the regulatory framework on interest rates for all regulated entities (REs) to ensure harmonization and proportionality.
Key Points
- RBI will resume "on tap" licensing for Urban Cooperative Banks (UCBs) after a 20-year hiatus.
- Draft guidelines for UCB licensing will be released soon for stakeholder consultation.
- The RBI will also review concentration risk management guidelines for Rural Cooperative Banks (RCBs).
- Regulatory framework on interest rates for all regulated entities will be rationalized for harmonization.
Exam Facts
- RBI Governor: Sanjay Malhotra.
- Number of Urban Cooperative Banks (UCBs) as per RBI and NABARD: 1,457.
- Discussion paper on UCB licensing published: January 13, 2026.
- Credit Monitoring Arrangement (CMA) instructions for RCBs issued in 2008.
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