The Union Minister of Cooperation committed it, while addressing the international conference on the urban cooperative credit sector-Co-Op Kumbh 2025 in New Delhi.
- The government also launched Sahkar Digi-Pay and Sahkar Digi-Loan applications that will enable even the smallest UCBs to offer digital payment and loan facilities.
About Urban Cooperative Banks (UCBs)
- They are a subset of cooperative banks in India that operate primarily in urban and semi-urban areas.
- History: Cooperative Credit Societies Act of 1904 and its 1912 amendment laid the legal foundation.
- They are registered as cooperative societies under the respective State Cooperative Societies Acts (for single-state operations) or the Multi-State Cooperative Societies Act, 2002 (for operations across multiple states).
- Control and Regulation: UCBs function under a dual regulatory framework:
- Banking Regulation Act, 1949: They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966.
- The Banking Regulation (Amendment) Act, 2020 has given RBI more control over UCBs, allowing it to intervene in their management and governance.
- Registrar of Cooperative Societies (RCS): The respective state governments or the central government control administrative functions through the RCS.
Significance of UCBs
Challenges to UCBs: Concentrated in few states (Like Andhra Pradesh, Maharashtra, Gujarat), Dual regulation by RBI and state cooperative bodies, acute market competition with Small Finance Banks (SFBs), FinTechs, etc. |
