Monetary policy review: No takers for RBI's move on small finance banks

The move is largely being perceived as a move to destabilise the cooperative sector

While the Reserve Bank of India (RBI) has allowed urban cooperative banks (UCB) to convert into small finance banks (SFBs), there are hardly any takers, as it is largely being perceived as a move to destabilise the cooperative sector. Notably, UCBs are the strongest sectors in cooperative banking sector, as its counterpart, the three-tier rural cooperative sector, has long been struggling with high NPAs and losses.

“When Gandhi committee released its report on cooperative banks, the general body resolved not to accept its recommendation. Conversion of UCBs into banks will weaken the cooperative structure, and hence we are not in