‘RBI, UCBs Must Work With Greater Trust’: Amit Shah Calls For Stronger Coordination

Union Home Minister and Cooperation Minister Amit Shah on Saturday called for stronger coordination between the Reserve Bank of India (RBI) and urban cooperative banks (UCBs). He urged both sides to move beyond longstanding perceptions and work with greater trust and confidence.

Speaking at the inauguration of the National Urban Cooperative Finance and Development Corporation’s (NUCFDC) new office at the BSE, Shah said the RBI had adopted a supportive approach towards UCBs in recent years. He said the central bank responded positively when the government and the cooperative banking sector approached it constructively.

Shah highlighted several RBI measures. These include relaxed branch expansion norms, doorstep banking services, demand drafts, life certificates and a dedicated nodal officer for UCBs.

The Minister welcomed higher gold loan limits and one-time settlement provisions. UCBs currently hold deposits exceeding ₹6 lakh crore.

Shah’s remarks came days after RBI Governor Sanjay Malhotra announced progress towards an on-tap licensing framework for UCBs.

The Minister highlighted the sector’s lending potential. He described small borrowers as a relatively secure segment.

Recalling his tenure as chairman of a cooperative bank in Gujarat, Shah said the bank issued collateral-free loans of up to ₹2.5 lakh. It recorded repayment rates above 99 per cent, including interest.

Shah also urged UCBs to strengthen their association with NUCFDC. Only around 690 banks currently belong to the umbrella body. He suggested lowering membership fees to bring all nearly 1,400 UCBs into the fold.

Shah further announced that NUCFDC will shift its head office from New Delhi to Maharashtra.

The state has 449 UCBs. Maharashtra, Gujarat, Goa and Karnataka together account for nearly 70 per cent of India’s UCBs.

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