In a major policy boost for the cooperative banking sector, the Maharashtra Finance Department has approved TJSB Sahakari Bank Ltd., a leading multi-state urban cooperative bank, to handle select government-related banking transactions for the financial year 2025-26.
The approval was issued through a Government Resolution (GR), marking a significant shift after years of limited access for urban cooperative banks to government business.
Speaking to Indian Cooperative, TJSB Chairman Sharad Gangal said the approval is the result of dedicated follow-up with the State Government for nearly three-and-a-half years. “We began the correspondence almost 3.5 years ago, repeatedly urging the Government to frame fair and transparent criteria for allowing cooperative banks to undertake such transactions. The approval reflects trust in our consistency and credible performance,” he said.
Gangal described the development as a major milestone for TJSB and a significant boost for the entire urban cooperative banking sector. He noted that, coinciding with the International Year of Cooperatives 2025, this permission comes at a timely moment, strengthening confidence in UCBs across the State.
He underlined that this is the first time since the PMC Bank crisis that an urban cooperative bank has been permitted to engage in government-related banking activity. “Before the PMC episode, many government institutions were banking with us. This decision once again opens the door for government bodies to engage with a UCB, and we are grateful for the confidence the State has shown in us,” he added.
He further noted that the bank now aims to inspire other major UCBs in Maharashtra to meet the criteria outlined by the Government. “This is about cooperation among cooperatives. If we can guide and support other UCBs to attain these standards, more institutions will be able to benefit from this opportunity, thereby strengthening the sector as a whole,” Gangal said.
According to the GR, TJSB Sahakari Bank has been assessed as compliant with the Reserve Bank of India’s financial soundness and regulatory norms required for classification as a “Financially Sound and Well Managed” (FSWM) urban cooperative bank.
Based on a recommendation from the Cooperation, Marketing & Textile Department, the Government has granted the bank eligibility for several key government-related functions for 2025–26.
As per the approval, TJSB can now open salary and allowance accounts of Drawing and Disbursing Officers (DDOs) for government employee payments. It is also authorised to open pension accounts of retired personnel.
Additionally, the bank can accept surplus fund investments of State Public Sector Enterprises and State Corporations, and conduct all categories of banking transactions pertaining to Government offices and State-run entities. The approval remains valid for one year or until a further resolution is issued.
The GR also directs regional authorities to ensure continuous compliance of the bank with all prescribed financial, liquidity and security norms before executing any government-related transaction. It further clarifies that matters related to Urban Local Bodies and Panchayati Raj Institutions will be decided separately by the respective departments.
