{"id":369025,"date":"2026-08-06T15:59:15","date_gmt":"2026-08-06T10:29:15","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=369025"},"modified":"2026-08-06T15:59:15","modified_gmt":"2026-08-06T10:29:15","slug":"licensing-for-urban-co-operative-banks-ucbs","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/licensing-for-urban-co-operative-banks-ucbs\/","title":{"rendered":"Licensing for Urban Co-operative Banks (UCBs)"},"content":{"rendered":"<div class=\"content-box-green\">\n<p><strong>News:<\/strong> The Reserve Bank of India (RBI) plans to re-start issuing fresh licensing for Urban Co-operative Banks (UCBs)after a gap of two decades.<\/p>\n<\/div>\n<h2 class=\"red-h2-box\">About Licensing for Urban Co-operative Banks (UCBs)<\/h2>\n<figure style=\"width: 467px\" class=\"wp-caption aligncenter\"><img data-recalc-dims=\"1\" loading=\"lazy\" decoding=\"async\" class=\"\" src=\"https:\/\/i0.wp.com\/staticprintenglish.theprint.in\/wp-content\/uploads\/2026\/01\/China-Russia-continue-to-target-Canada-Canadian-intelligence-agency-Read-more-At-httpswww.aninews.innewsworldotherschina-russia-continue-to-target-canada-canadian-intelligence-agency2025111411324-35.png?resize=467%2C263&#038;ssl=1\" alt=\"Licensing for Urban Co-operative Banks (UCBs)\" width=\"467\" height=\"263\" \/><figcaption class=\"wp-caption-text\">Source: The Print<\/figcaption><\/figure>\n<ul>\n<li>The Reserve Bank of India (RBI) has<strong> proposed to restart issuing fresh licences<\/strong> for setting up <strong>Urban Co-operative Banks (UCBs)<\/strong> after a gap of nearly <strong>20 years<\/strong>.<\/li>\n<li>The proposal has been released through the <strong>Draft Guidelines for &#8216;On-Tap&#8217; Licensing of UCBs<\/strong>.<\/li>\n<li><strong>Eligibility Criteria<\/strong>\n<ul>\n<li>Only existing <strong>Multi-State Credit Co-operative Societies (CCSs)<\/strong> are eligible to apply.<\/li>\n<li>The applicant society must have been operational for at least <strong>10 years<\/strong>.<\/li>\n<li>It must have <strong>deposits of at least \u20b910,000 crore<\/strong>.<\/li>\n<li>It must have a <strong>minimum net worth of \u20b9300 crore<\/strong>.<\/li>\n<li>The society must have shown a <strong>positive and progressive trend<\/strong> in its financial and operational performance during the previous <strong>five years<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Financial Requirements<\/strong>\n<ul>\n<li>The <strong>Capital to Risk-Weighted Assets Ratio (CRAR)<\/strong> should not be less than <strong>12%<\/strong>.<\/li>\n<li>The <strong>Net Non-Performing Assets (Net NPA) ratio<\/strong> should not exceed <strong>3%<\/strong> as on <strong>March 31<\/strong> of the financial year preceding the application.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Approval for Conversion<\/strong>\n<ul>\n<li>The <strong>proposal to convert a Credit Co-operative Society into a bank<\/strong> must be approved by the shareholders.<\/li>\n<li>The resolution must be passed by a <strong>two-thirds majority<\/strong> of shareholders, both in <strong>number and value<\/strong>, present in person at the meeting.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Restriction on Reapplication:<\/strong> If an application for a banking licence is rejected, the applicant cannot apply again for <strong>three years<\/strong> from the date of rejection.<\/li>\n<li><strong>Governance and &#8216;Fit and Proper&#8217; Criteria<\/strong>\n<ul>\n<li>The RBI will assess whether the Board of Directors meets the <strong>&#8216;fit and proper&#8217;<\/strong> criteria.<\/li>\n<li><strong>Directors must have a record of integrity and sound credentials.<\/strong><\/li>\n<li>Directors <strong>should not have defaulted on loans<\/strong> from any bank or financial institution.<\/li>\n<li>No member of the society can hold more than <strong>5% shareholding<\/strong> in the Credit Co-operative Society.<\/li>\n<li>Directors must satisfy the eligibility requirements under the <strong>RBI (Urban Co-operative Banks \u2013 Governance) Directions, 2025<\/strong> and the <strong>Banking Regulation Act, 1949<\/strong>.<\/li>\n<li>No director should perform an executive role or hold a designation implying executive responsibilities in the society.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Business Plan Requirements<\/strong>\n<ul>\n<li>Applicants must submit a <strong>detailed business plan<\/strong> along with the application.<\/li>\n<li>The business plan must explain the objectives of the proposed bank and how it will achieve them, particularly in the area of <strong>financial inclusion<\/strong>.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Penalties: <\/strong>If a <strong>bank deviates<\/strong> from its approved business plan <strong>after receiving a licence, <\/strong>the RBI may:\n<ul>\n<li>Restrict the bank&#8217;s expansion.<\/li>\n<li>Change its management.<\/li>\n<li>Impose other regulatory or penal measures.<\/li>\n<li>Screening Process<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<table style=\"width: 100%; border-collapse: collapse; border-style: solid;\">\n<tbody>\n<tr>\n<td style=\"width: 100%;\">\n<h2 class=\"red-h2-box\"><strong>About Urban Co-operative Banks (UCBs)<\/strong><\/h2>\n<ul>\n<li>A co-operative society registered under a State Co-operative Societies Act or the Multi-State Co-operative Societies Act <strong>must obtain a banking licence from the Reserve Bank of India (RBI)<\/strong> under <strong>Section 22 read with Section 56 of the Banking Regulation Act, 1949<\/strong> to undertake banking business.<\/li>\n<li>A co-operative society that receives this banking licence as a <strong>primary co-operative bank<\/strong> is commonly known as an <a href=\"https:\/\/forumias.com\/blog\/urban-cooperative-banks\/\"><strong>Urban Co-operative Bank (UCB)<\/strong>.<\/a><\/li>\n<\/ul>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n","protected":false},"excerpt":{"rendered":"<p>News: The Reserve Bank of India (RBI) plans to re-start issuing fresh licensing for Urban Co-operative Banks (UCBs)after a gap of two decades. About Licensing for Urban Co-operative Banks (UCBs) The Reserve Bank of India (RBI) has proposed to restart issuing fresh licences for setting up Urban Co-operative Banks (UCBs) after a gap of nearly&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/licensing-for-urban-co-operative-banks-ucbs\/\">Continue reading <span class=\"screen-reader-text\">Licensing for Urban Co-operative Banks (UCBs)<\/span><\/a><\/p>\n","protected":false},"author":10366,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,12039],"tags":[11872,12044],"class_list":["post-369025","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-knolls","tag-9pm-daily-factly","tag-business-line","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/369025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10366"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=369025"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/369025\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=369025"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=369025"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=369025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}