Ministry pushing RBI to open licences for more urban cooperative banks: Secretary Ashish Kumar Bhutani

📌 Summary:

• The Ministry of Cooperation has urged the RBI to open licensing for more urban cooperative banks (UCBs), saying India needs a UCB in every town and a district central cooperative bank in every district
• Of 1,450 UCBs, nearly 1,100 are concentrated in just three states — Maharashtra, Gujarat and Karnataka; hundreds of districts have none
• Secretary Ashish Kumar Bhutani said UCB licensing is a top ministry focus and it is engaging with the RBI board on a new licensing policy
• A Gujarat pilot (Panchmahal, Banaskantha) mandating members to bank only with cooperatives generated Rs 20,000 crore additional deposits and 8 lakh new Kisan Credit Cards at 0% interest
• Focus has shifted from mere regulation to development of the cooperative sector after the creation of the Ministry of Cooperation

🎯 UPSC Relevance: GS3 Economy — cooperative banking, financial inclusion and rural credit deepening

📝 Prelims Facts:

• UCBs are regulated by the RBI (banking functions) and registered under state/central cooperative societies laws — a dual regulation model
• India has 1,450 UCBs; the Ministry of Cooperation was created in 2021
• Kisan Credit Card (KCC) provides short-term crop loans, often at subvented/0% effective interest

🔑 Key Term: Urban Cooperative Bank (UCB) — a primary cooperative bank in urban/semi-urban areas under dual regulation of the RBI and state registrars.