RBI Proposes ₹300 Cr Capital, Strict Norms for New Urban Co-op Bank Licenses

• RBI releases discussion paper proposing new licenses for Urban Co-operative Banks (UCBs) after two decades.
• New UCBs may require a minimum capital of ₹300 crore and strict regulatory norms.
• Licensing was halted in 2004 due to financial weaknesses, poor governance, and limited capital of many UCBs.
• RBI seeks stakeholder suggestions until February 13, 2026, on resuming licensing and eligibility criteria.
• Proposed criteria include 10 years operational experience, 5 years good financial track record, 12% CRAR, and Net NPA not exceeding 3%.

Why It Matters: RBI aims to strengthen the UCB sector by proposing stringent capital and operational requirements for new licenses.