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Business
RBI’s Policy Shift Could Lift 22‑Year Ban, Allow Gujarat to Open Up to Six New Co‑operative Banks
✍️ Vibes Of India
🗓 21 Aug 2026, 05:02 AM
👁 4
The Reserve Bank of India is considering a regulatory change that may end a 22‑year freeze on new co‑operative banks, potentially allowing Gujarat to set up four to six fresh institutions.
The Reserve Bank of India has signalled a possible amendment to the guidelines that have barred the creation of new co‑operative banks since 2002, a restriction that has lasted 22 years.
Industry sources say the proposed change could enable the state of Gujarat, which currently operates a limited co‑operative banking network, to launch four to six additional banks.
The RBI hopes the move will deepen financial inclusion, channel more credit to agriculture and micro‑small‑medium enterprises, and bring the co‑operative sector in line with broader banking reforms.
Final approval will require a formal notification and each prospective bank will have to meet the RBI’s capital, governance and risk‑management criteria before commencing operations.
Financial analysts note that while increased competition may improve service quality and outreach, robust oversight will be essential to safeguard depositor interests.
Industry sources say the proposed change could enable the state of Gujarat, which currently operates a limited co‑operative banking network, to launch four to six additional banks.
The RBI hopes the move will deepen financial inclusion, channel more credit to agriculture and micro‑small‑medium enterprises, and bring the co‑operative sector in line with broader banking reforms.
Final approval will require a formal notification and each prospective bank will have to meet the RBI’s capital, governance and risk‑management criteria before commencing operations.
Financial analysts note that while increased competition may improve service quality and outreach, robust oversight will be essential to safeguard depositor interests.