EconomyFriday, 7 August 2026·The Hindu - Economy
RBI’s renewed licensing policy for urban cooperative banks: key facts, history and regulation
The RBI has resumed issuing licences to urban cooperative banks after more than two decades, reviving a key segment of cooperative banking.
Key highlights
Direct fact
In 2026, the Reserve Bank of India (RBI) decided to resume issuing licences to urban cooperative banks after more than two decades, reversing a policy that had stopped fresh licences from 2004.
Key specifics
- Urban cooperative banks (UCBs) were originally meant to bridge informal community finance and formal banking.
- As of March 31, 2003, there were 2,104 UCBs, including 56 scheduled banks.
- About 79% of the UCBs were concentrated in five States: Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu.
- The first urban cooperative credit society was registered in Kanjivaram in Madras province in October 1904.
- The 1904 Cooperative Credit Societies Act is cited as the origin of the UCB movement.
Exam lens
Economy and banking question type, cooperative banking, RBI regulation, 1904 Cooperative Credit Societies Act, and the March 31, 2003 UCB count are the main MCQ anchors; TNPSC may ask about the role of UCBs in financial inclusion.