Two-Decade Freeze Ends: RBI Clears Path for New Cooperative Banks
What Happened
RBI has announced that it will resume issuing licences for Urban Cooperative Banks on an"on-tap" basis, ending a pause that has lasted for more than two decades (since 2004). RBI Governor Sanjay Malhotra said draft guidelines will be released shortly for public consultation, based on feedback received on a discussion paper issued earlier this year.
Key Takeaways
The decision reflects the RBI’s confidence that regulatory reforms, stronger supervision, and improved governance have strengthened the cooperative banking ecosystem, paving the way for a controlled expansion of the sector through new Urban Cooperative Bank licences.