Tough times for urban cooperative banks as bad loans build, ranking dips

Lenders that hold more than Rs 5 trillion in deposits are weaker after the pandemic

Urban cooperative banks in India, set up after the success of similar initiatives in Europe, trace their history to the 19th century.

The last few years have not been great for the segment, which holds more than Rs 5 trillion in deposits, shows a Business Standard analysis of Reserve Bank of India (RBI) data released as part of its ‘Primary (Urban) Co-operative Banks’ Outlook 2022-23’.

Cooperative banks are popular because they often give higher interest than other banks but many of them are financially weaker after the pandemic. The RBI rates banks on the basis of factors like capital adequacy,