India’s cooperative banking sector continues to face pressure, with the Deposit Insurance and Credit Guarantee Corporation (DICGC) reporting 17 deregistration during 2024-25, including 15 cooperative banks and 2 commercial banks. Only two banks were newly registered during the year – the Daman & Diu State Cooperative Bank and one foreign bank.
From Andhra Pradesh to Uttar Pradesh, several cooperative banks across India lost their DICGC membership, with Maharashtra alone witnessing the exit of five.
The banks that lost membership include Uravakonda Cooperative Town Bank and Durga Co-operative Urban Bank in Andhra Pradesh; Mahabhairab Co-op Urban Bank in Assam; The Vaishali Shahari Vikas Co-op Bank in Bihar; Citizen Co-op Bank in Goa; and National Co-operative Bank, Bangalore in Karnataka.
In Maharashtra, the exits included City Cooperative Bank, Rajapur Sahakari Bank, Anjangaon Surji Nagari Sahakari Bank, Pune Commercial Co-op Bank, and Jawahar Sahakari Bank. Other banks that lost membership were Cuddalore & Villipuram D.C. Co-op Bank in Tamil Nadu, Yadagiri Lakshmi Narasimha Swamy Co-operative Urban Bank in Telangana, and in Uttar Pradesh, Purvanchal Cooperative Bank and Banaras Mercantile Cooperative Bank.
As a result, the total number of registered banks declined to 1,982 as on March 31, 2025, compared to 1,997 a year earlier. This marks a continuing downward trend since 2001, when registrations peaked at 2,728.
Despite shrinking numbers, cooperative banks remain central to India’s financial inclusion network. Of the 1,982 registered institutions, as many as 1,843 (93%) are cooperative banks, comprising 1,458 Urban Cooperative Banks (UCBs), 34 State Cooperative Banks, and 352 District Central Cooperative Banks.
In contrast, commercial banks account for just 139, including Scheduled Commercial Banks, Regional Rural Banks, Small Finance Banks, Payment Banks, and Local Area Banks.
Importantly, cooperative banks continue to offer stronger deposit insurance coverage, providing greater protection to small depositors.
Their insured deposit ratio stands at 63.1%, significantly higher than the 41.5% reported by commercial banks. Similarly, 98.3% of cooperative bank accounts are fully protected under deposit insurance, marginally ahead of the 97.6% in commercial banks.
The DICGC levies banks a flat rate premium of 0.12 per cent per annum on the total assessable deposits for providing deposit insurance. During 2024-25, deposit insurance premium received was Rs 26,764 crore, recording a y-o-y growth of 12.1 per cent.
During 2024-25, the total claims settled by the Corporation amounted to Rs 476 crore.
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