The Reserve Bank of India’s Annual Report 2025-26, released on Friday, has laid out an extensive supervisory agenda for Urban Cooperative Banks (UCBs) for 2026-27, with major focus on data quality, cyber security, risk-based supervision and staff capacity building under the Utkarsh 2029 roadmap.
According to the report, the RBI has identified six major goals for supervision of UCBs in 2026-27. These include development of a Supervisory Data Quality Index (sDQI) for Tier-3 and Tier-4 UCBs, migration of select UCBs to risk-based supervision and enhancement of gap assessment and information technology (IT) examination coverage.
The central bank has also proposed cyber mapping exercises for UCBs operating under cyber security framework levels 2, 3 and 4, besides issuance of updated cyber security guidelines for cooperative banks.
In a significant move aimed at strengthening governance and operational capabilities in the sector, the RBI said capacity building of UCB staff will be augmented through in-person workshops and e-learning programmes under Mission SAKSHAM (Sahakari Bank Kshamata Nirman).
The report further noted that the Department of Supervision has completed a comprehensive review of the Risk-Based Approach (RBA) for KYC/AML supervision of select UCBs under “Utkarsh 2.0”.
The revised framework now covers UCBs accounting for around 60 per cent of total deposits of the sector and places sharper focus on inherent KYC risks, money laundering, terrorism financing and emerging segment-wide risks.
The RBI also stated that the process for development of a Risk-Based Supervisory Framework for UCBs has already been initiated. Draft updated cyber security guidelines for UCBs have also been formulated and will be issued for public consultation before finalisation.
Separately, under the Department’s broader agenda for 2025-26, the RBI said it has explored the feasibility of developing a macro stress test framework for Tier-3 and Tier-4 UCBs, in line with scheduled commercial banks (SCBs). The liquidity stress test framework for NBFCs, meanwhile, is at an advanced stage of development.
The RBI further noted that supervision of banks, UCBs and NBFCs continues under the unified Department of Supervision (DoS), operational since 2019, enabling a holistic supervisory approach across regulated entities.
