‘Bank in a Box’ for Urban Cooperative Banks

The Union Home Minister launches ‘Bank in a Box’ for Urban Cooperative Banks (UCBs). It provides an integrated service bundle combining core banking, digital payments, cloud services, and regulatory compliance facilities.

Bank in a Box and Urban Cooperative Banks:

Dimension	Key Details
Service Access	‘Bank in a Box’ provides for a small, single-branch urban cooperative bank to offer banking services without heavy investments in technology.
Branch Expansion	UCBs are authorised to open up to 15% additional branches without separate permission.
Doorstep Banking	The measures provide for extending doorstep banking services.
Tier-3 Cooperative Banks	The measures provide for simplifying the process for eligible Tier-3 cooperative banks to obtain scheduled-bank status.
RBI Interface	The measures provide for appointing an RBI nodal officer for regular interaction with the sector.
Priority Sector Lending	The Priority Sector Lending target for UCBs is reduced from 75% to 60%.
Housing Loan Limits	Housing-loan limits for UCBs are enhanced.
Member Lending Institutions Status	UCBs, State Cooperative Banks, and District Cooperative Banks are accorded the status of ‘Member Lending Institutions’, enabling risk coverage of up to 85% and access to collateral-free lending.
Priority Sector Lending Limit (Cooperative Societies)	The priority sector lending limit for cooperative societies is increased from ₹5 lakh to ₹10 crore.
Origins (Legislation)	Urban Cooperative Banks trace their origins to the 1904 Cooperative Credit Societies Act.
Government of India Act, 1919	The Government of India Act, 1919 provides for transferring the subject of “cooperation” from the Government of India to the provincial governments.
State Cooperative Societies Act, 1925	The Government of Bombay passes the first State Cooperative Societies Act in 1925.
Varde Committee (1963)	The Varde Committee (1963) recommends that such banks should be organised at all urban centres with a population of 1 lakh or more, and not by any single community or caste, and it introduces the concept of minimum capital requirement and population criteria for defining the urban centre where UCBs are incorporated.
Madhavdas Committee (1979)	The Madhavdas Committee (1979) evaluates the role played by urban co-operative banks in greater detail.
What “UCBs” Refer To	The term ‘Urban Co-operative Banks’ (UCBs), though not formally defined, refers to primary cooperative banks located in urban and semi-urban areas.
State Distribution	Maharashtra comprises 449 urban cooperative banks, and about 79% of UCBs are located in 5 states: Andhra Pradesh, Gujarat, Karnataka, Maharashtra, and Tamil Nadu.