Urban Cooperative Banks (UCBs) must accelerate growth and expand their market share to remain relevant in India’s rapidly evolving banking landscape, RBI Central Board Director Satish Marathe said on Saturday, warning that the sector cannot afford to lag behind while the rest of the banking industry is witnessing double-digit growth.
Addressing the International Day of Cooperatives celebrations organised by NAFCUB in New Delhi, Marathe noted that while the overall banking sector is growing at 12-15 per cent annually, UCBs are registering only 4-5 percent growth.
Marathe observed that many UCBs are financially robust, with several reporting zero NPAs and provision coverage ratios exceeding 100 per cent. However, he cautioned that strong balance sheets alone would not ensure long-term sustainability unless banks expand their business and improve competitiveness.
He attributed the slower growth partly to rising cost-to-income ratios and stressed that technology adoption is no longer optional. With India’s digital payments ecosystem witnessing massive growth, customers now expect seamless digital banking services, competitive deposit rates and affordable credit.
Marathe said technology upgrades must be backed by continuous staff training, stronger governance, professional management and succession planning.
He also urged UCBs to prepare long-term vision documents and highlight their contribution to the Sustainable Development Goals (SDGs) in their annual reports, underlining the cooperative banking sector’s important role in driving inclusive economic growth.
