In a written reply in Rajya Sabha, Union Ministry of State for finance Pankaj Chaudhary said that the Reserve Bank of India cancelled the license of 78 urban cooperative banks after 2014 on several grounds.
“The reasons for cancelling these licenses were, among others, inadequate capital, poor earning prospects, deteriorating financial position, and the continuation of operations being prejudicial to the interests of depositors and the public at large”, he added.
In 2024 (from January 2024-July 2024), 10 UCBs lost the license whereas in 2023 (from February 2023-December 2023), 18 urban cooperative banks licenses were cancelled.
He further said, “RBI has taken several initiatives aimed at timely identification and resolution of stressed assets with the banks’ boards entrusted with the responsibility of ensuring effective oversight. To address the issue of elevated NPAs, RBI has issued ‘Prudential Guidelines on Restructuring of Advances by UCBs’ and ‘Guidelines on the Transfer of Stressed Loan”.
RBI has implemented several measures to expand the operations and strengthen the financial health of cooperative banks.
“As informed by National Bank for Agriculture and Rural Development (NABARD), none of the Rural Cooperative Banks viz. State Cooperative Banks (StCBs)/District Central Cooperative Banks (DCCBs) have been closed since 2014”, Chaudhary stated.