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NUCFDC Seeks RBI Nod to Allow Small UCBs to Offer Digital Banking Services.

National | Dated: 22 Nov 2025

The National Urban Co-operative Financial and Development Corporation Limited (NUCFDC) is seeking the Reserve Bank of India's (RBI) approval to allow smaller Urban Cooperative Banks (UCBs) to offer digital banking services, including UPI and mobile banking. Currently, RBI rules restrict digital services primarily to UCBs with a net worth above ₹50 crore. NUCFDC, which acts as the apex body, argues that enabling small UCBs (those with net worth below ₹50 crore) to go digital is essential for financial inclusion, enhancing their operational competitiveness, and preventing the loss of customers to large commercial banks.

🎯 Key Highlights:

  • NUCFDC is seeking RBI approval for digital banking services by small UCBs.
  • The current restriction applies to UCBs with a net worth below ?50 crore.
  • The goal is to enhance financial inclusion and UCBs' operational competitiveness.

💡 Other Important Facts:

  • The move is part of the central government's cooperative reform agenda.
  • Digitalization is necessary for UCBs to survive in the competitive FinTech landscape.
  • It addresses the infrastructure gap between urban and rural banking services.

📚 Test Your Knowledge:

The National Urban Co-operative Financial and Development Corporation Limited (NUCFDC) is seeking approval from which regulatory body?

Correct Answer: Reserve Bank of India (RBI)

🚀 Quick Recap:

About UCB Regulation

  • (i) Apex Body: NUCFDC (National Urban Co-operative Financial and Development Corporation Ltd). (ii) Regulatory Body: Reserve Bank of India (RBI).
  • (iii) Current Rule: UCBs with net worth above ?50 crore generally qualify for digital services. (iv) Significance: UCBs hold a large volume of public deposits (around ?5.5 trillion).