India
RBI draft norms may end freeze on new urban co-op banks
The Reserve Bank of India has proposed relaxing norms for fresh licences, potentially ending a 22-year freeze on new urban co-operative banks (UCBs) imposed after the Madhavpura Mercantile Cooperative Bank scam. In Gujarat, four to six cooperative credit societies may apply under stricter eligibility rules.
More than two decades after the Reserve Bank of India (RBI) halted fresh licences for new urban co-operative banks (UCBs), the central bank’s proposed licensing relaxations could allow new entrants. The freeze followed the Madhavpura Mercantile Cooperative Bank (MMCB) crisis, in which depositors lost savings estimated at over Rs 1,000 crore. Under the proposed framework, stricter eligibility rules are expected. In Gujarat, four to six co-operative credit societies are expected to seek approval to start UCBs. The proposal could create a long-term pipeline for new licences, according to the report.
- Reserve Bank of India
- RBI
- urban co-operative banks
- UCBs
- Gujarat
- Ahmedabad
- Madhavpura Mercantile Cooperative Bank
- MMCB scam
- Jyotindra Mehta
- FUCBCS
- Union Cooperation Ministry
- cooperative credit societies
- new UCB licences
- RBI draft licensing framework
- 2004 ban on UCB licences
- Multi-State Cooperative Societies Act 2002
- CRAR 12%
- capital-to-risk weighted assets ratio
- minimum deposits Rs 10
- 000 crore
- net worth Rs 300 crore
- depositors lost Rs 1
- cooperative banking ecosystem
- ownership concentration cap 5%
- board of directors track record
- Gujarat urban cooperative banks 204
- 1
- 200 branches
- India 1
- 437 UCBs
- 11
- 000 branches
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