Prateek Tanmay
3 min readNew DelhiJul 28, 2026 03:02 AM IST
The Ministry of Cooperation has urged the Reserve Bank of India (RBI) to open licences for more urban cooperative banks in the country, a top official said on Monday.
Speaking at a book release function, Cooperation Ministry Secretary Ashish Kumar Bhutani said that India needs urban cooperative banks (UCBs) in every town of the country.
Echoing the views, Satish K Marathe, director, Central Board of RBI, said there are hundreds of districts in the country that do not have UCBs.
“Of the 1,450 UCBs in the country, almost 1,100 are in three states — Maharashtra, Gujarat, and Karnataka. The rest of the country has very few (urban cooperative) banks,” Marathe said, speaking after the release of the book ‘Cooperative Management: The Indian Perspective’, co-authored by KK Tripathy, Joint Secretary in the Economic Advisory Council to The Prime Minister. Harekrishna Misra and SK Wadkar co-wrote the book.
Responding to the remarks made by Marathe, Bhutani said, “This is one of the biggest, I would say, focus areas for the ministry… We are… agitating with Mr Marathe in the RBI to open up licensing, bring in licensing policy for the UCBs.”
He said, “The Honorable Minister [Amit Shah] has also said in many forums that we need UCBs in every town of the country, and we need a district central corporate bank in every district of the country.”
Bhutani also shared how a pilot project started in Gujarat helped the cooperative banks in raising additional resources.
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He said, “A lot of cooperatives are working in this space. A lot of people are working, institutions are working (in the cooperative sector), but all their bank accounts are in other banks (banks in the non-cooperative sector). What we did is that we opened all the bank accounts in the cooperative banks. All members were asked to open accounts only in cooperative banks.”
Bhutani said, “We started with two pilot projects in the state of Gujarat – in Panchmahal and Banaskantha districts. It expanded to the entire state… What has happened is [Rs] 20,000 crore of additional deposit in the cooperative banks. Nearly 8 lakh new KCC (Kisan credit cards) cards were issued to members where they could access the government schemes and get loan at 0% interest,” Bhutani said.
Bhutani said that earlier, the focus was regulation of the cooperative sector. It was after the creation of a new ministry that the government has focused on development of this sector, he said.
Earlier this year, the RBI published a discussion paper on licensing of new UCBs. The discussion paper had tentatively proposed that UCBs having good financial track record with a minimum capital of Rs 300 crore along with other conditions may be considered for licensing.
In 2004, the RBI had stopped issuing licences for UCBs.
