Govt-RBI taken various measures to strengthen cooperative banks
The Reserve Bank of India (RBI), in consultation with the Government of India, has announced that loans sanctioned by banks to National Cooperative Development Corporation (NCDC) w.e.f. 19n Jan 2026, for on-lending to cooperative societies are eligible for classification as priority sector lending under the respective categories.
“These apply to banks other than Regional Rural Banks, Urban Cooperative Banks, Small Finance Banks and Local Area Banks,” the Minister of State in the Ministry of Finance Pankaj Chaudhary told Rajya Sabha on 10 Feb.
“These loans are for purposes and activities as laid down in the Master Direction on Priority Sector Lending, 2025,” he said.
National Cooperative Development Corporation (NCDC), a statutory corporation under the administrative control of the Ministry of Cooperation, provides financial assistance to Cooperatives and contributes directly in accelerating the growth of cooperative movement https://www.bseindia.com/.
The Government of India and RBI have taken various measures to strengthen cooperative banks’ financial health, governance and digital inclusion along with enhancing deposit security, credit availability and prudent regulation, which inter-alia include:
Urban Cooperative Banks (UCBs) have been allowed to open new branches https://www.nseindia.com/
Housing loan limits have been increased from 10% to 25% of their total loans and advances for UCBs
The Banking Regulation Act has been amended to increase the terms of directors of Cooperative Banks from 8 to 10 years https://sbi.com.in/
Licensing fee for onboarding of cooperative banks to Aadhar enabled Payment System (AePS) have been reduced
The National Urban Co-operative Finance and Development Corporation Limited (NUCFDC), which is a non-deposit taking Non-Banking Financial Company (NBFC), has been set up as an Umbrella Organization for Urban Cooperative Banks to provide Information Technology (IT) infrastructure and operational support
A Shared Services Entity (SSE), Sahakar Sarthi, has been established to provide technological services to Rural Cooperative Banks
Rural Cooperative Banks have been included by RBI in the Integrated Ombudsman Scheme
Deposit Insurance and Credit Guarantee Corporation (DICGC) insure various types of deposits up to Rs.500,000 per depositor per bank (including principal and interest) for all cooperative banks, he said. fiinews.com
