Cooperative banks are set for a major transformation as RBI joins forces with the Union Government. The focus is sharpening financial soundness, operational prowess, digital outreach, deposit protection, lending ease, and regulatory vigilance.
In Rajya Sabha, Finance Minister of State Pankaj Chaudhary detailed the roadmap. A key announcement: From January 19, 2026, NCDC loans from banks will count towards priority sector targets under 2025 guidelines, applicable to regional rural, urban co-op, small finance, and local area banks.
Urban co-ops see expanded horizons—new branches without hurdles and 25% loan book for housing (previously 10%). Banking laws now allow 10-year director tenures, AePS costs are lowered, and NUCFDC provides essential IT and ops backbone for urban players.
Rural cooperatives get ‘Sahkar Sarathi’ tech portal and Ombudsman scheme integration by RBI. This multi-pronged strategy tackles longstanding issues, from liquidity crunches to tech gaps.
As India pushes financial inclusion, these steps ensure co-op banks evolve into modern, trustworthy institutions. The ripple effects will boost credit to underserved sectors, driving economic progress from villages to cities.