In a significant boost to India’s cooperative banking sector, the Reserve Bank of India (RBI) has removed the Rs 50-crore net worth requirement for rural cooperative banks to undertake insurance distribution, a move expected to deepen financial inclusion across rural India.
Announcing the decision, the Ministry of Cooperation said the relaxation will enable 2 State Cooperative Banks (StCBs) and 106 District Central Cooperative Banks (DCCBs) to offer insurance products to their customers, substantially expanding access to financial protection in villages.
The reform, implemented with RBI’s support, removes a key regulatory hurdle that had prevented several financially sound but smaller cooperative banks from entering the insurance distribution business.
The Ministry termed the move another milestone in its drive to strengthen the cooperative ecosystem and ensure last-mile delivery of financial services.
