Mumbai, Aug. 5 -- The Reserve Bank of India on Wednesday released draft guidelines for on-tap licensing of urban co-operative banks (UCBs). The central bank cited the sector's improved financial health alongside its own expanded regulatory and supervisory powers as key reasons for the move. The decision was announced in the statement on developmental and regulatory policies, released alongside Wednesday's monetary policy statement.

"The financial health of the UCBs has improved over the years generally and also through consolidation in the sector and closure of many weak UCBs. Further, the regulatory and supervisory powers of the RBI have been strengthened," RBI said.

This follows a discussion paper published on 13 January 2026 for stak...