Union Minister of Cooperation Amit Shah spoke at the opening of a new office for the National Urban Cooperative Finance and Development Corporation (NUCFDC) at the BSE in Mumbai. He asked urban cooperative banks (UCBs) to move beyond their existing perceptions of the Reserve Bank of India (RBI).
Shah said the RBI has taken many steps to help the sector. He mentioned the liberalisation of branch expansion, the allowance of doorstep banking, and permission for UCBs to issue demand drafts and life certificates. A dedicated nodal officer was also appointed to handle matters related to UCBs.
According to Shah, UCBs hold more than Rs 6 lakh crore in deposits. He welcomed the RBI’s recent measures, such as higher limits for gold loans and permission for one‑time settlements.
The RBI Governor, Sanjay Malhotra, announced a new ‘on‑tap’ licensing scheme for UCBs. This ends a two‑decade pause and is part of the central bank’s effort to grow the sector while keeping regulatory oversight.
Shah highlighted the importance of small borrowers. He recalled his experience chairing a UCB in Gujarat where the bank gave loans of up to Rs 2.5 lakh without collateral. Repayments, including interest, exceeded 99 percent.
The minister urged UCBs to strengthen ties with NUCFDC, the sector’s umbrella organisation. NUCFDC currently has 690 members. Shah called for lower membership fees so that all 1,400 UCBs can join.
Membership in NUCFDC can give banks technical expertise, compliance support and cyber security solutions. He also asked banks to use the umbrella body’s security operations centre to boost depositor confidence.
Shah announced that NUCFDC will soon move its head office from New Delhi to Maharashtra. Maharashtra hosts 449 UCBs, and about 70 percent of all UCBs are in Maharashtra, Gujarat, Goa and Karnataka.
Drawing a comparison with the cooperative model behind Amul, Shah said that consolidation and collaboration among UCBs could create stronger institutions. He added that UCBs will play a key role in supporting proprietors and entrepreneurs as India works toward becoming a developed economy.