RBI Governor Sanjay Malhotra emphasized on customer-centric practices, ethical conduct and timely redressal of complaints while highlighting the continued role of UCBs in providing credit to underserved areas and supporting financial inclusion. | Photo credit: KUNAL PATIL/PTI
License assessment context
This observation comes against the backdrop of the RBI recently issuing a Discussion Paper (DP) on licensing of new UCBs, in view of the positive developments in the sector over the past two decades and in response to growing stakeholder demand.
The DP noted that if licensing of UCBs resumes, it may be prudent to license only large cooperative credit companies.
Background to the proposal
“A large cooperative credit company will have a longer track record. It would have established its governance and adopted good management practices,” the DP said.
As a result, many of the risks cited against resuming licensing will be mitigated. Moreover, it may be advisable to start, learn from experience and take corrective action if necessary.
Customer-oriented banking stress
During the meeting, the Governor also emphasized the need to adopt a customer-centric approach, follow ethical practices and resolve complaints in a timely manner to maintain customer confidence in the sector.
Malhotra emphasized the continued relevance of UCBs in providing credit, especially to the underserved areas, and expanding financial inclusion.
Policy support for cooperatives
The Governor also briefly touched on the various policy initiatives undertaken by the Reserve Bank with regard to the co-operative banking sector since the previous interaction and expressed confidence that these factors will help the sector to become stronger and grow in a healthy manner.
Published on January 19, 2026
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