Reserve Bank of India (RBI) to Resume Issuing Fresh Licences for Urban Cooperative Banks

Key facts

• The Reserve Bank of India (RBI) has decided to resume licensing of urban cooperative banks (UCBs) on an 'on tap' basis after a two-decade pause.
• The decision follows stakeholder feedback on a discussion paper published on January 13, 2026.
• RBI Governor Sanjay Malhotra announced that draft guidelines will be issued shortly for stakeholder consultation.
• The discussion paper proposed raising the minimum capital requirement for UCB licence eligibility to ₹300 crore.
• Applicant cooperative credit societies must have at least 10 years of active operations and five years of sound financial performance.
• At the time of licensing, the assessed CRAR should not be less than 12% and net NPA ratio should not exceed 3%.
• Preference may be given to multi-state cooperative credit societies, though strong uni-state entities may also be considered.
• The licensing decision considers improved regulatory oversight after the 2020 amendments and the role of the umbrella organisation.