The Urban Cooperative Banking (UCB) sector has delivered its strongest performance in the 2024-25 financial year but must now reinvent itself to meet future challenges, said Sahakar Bharati founder member and RBI Central Board Director Satish Marathe in his keynote address at the National Convention of UCBs in Jaipur on Wednesday.
Citing financial data as of March 31, 2025, Marathe highlighted that the sector’s capital adequacy ratio stands at 18%, the Provisioning Coverage Ratio (PCR) at 91%, and net NPAs at just 1.3%. “These are among the best numbers in the past five years. UCBs have truly kept pace with mainstream banking,” he remarked.
He added that only 30 UCBs remain under RBI’s Prompt Corrective Action (PCA) framework, while nearly 800 of around 1,400 cooperative banks are financially sound and well-managed.
Marathe emphasized that growth is no longer just about opening branches; it requires adopting technology, strengthening balance sheets, and building robust governance practices. He called on UCBs to prepare vision documents at the bank level to guide long-term growth and ensure a clear roadmap for the future.
He further stressed the importance of setting aside dedicated funds from profits for technology upgrades, skill development and succession planning, strong HR and compliance policies at the board level, and transparent internal audits to ensure accountability and reinforce trust.
“Banking today has become increasingly complex. Compliance, governance, and transparency must become the culture of every cooperative bank,” he said.
He also emphasized the need for continuous capital raising, noting that it is the only safeguard against both expected and unexpected losses. “Globally, regulatory supervision focuses on fostering a culture of compliance, and Indian UCBs must adopt the same approach,” he added.
Concluding, Marathe said the sector stands at a turning point, “With strong financials and reforms underway, UCBs are in their best shape in years. But to remain relevant and competitive, they must reinvent themselves with technology, capital, and professionalism.”
