R Gandhi committee of RBI recommends conversion of UCBs into regular banks

A Reserve Bank of India (RBI) committee has recommended conversion of Urban Cooperative Banks (UCBs) with business size of 20,000 crore rupees or more into regular banks.
This recommendation was given by the High Powered Committee on UCBs headed by RBI Deputy Governor R Gandhi in its report.

  • Conversion of UCBs will not be compulsory for large UCBs and they can continue the way they operate currently in terms of asset size and balance sheet.
  • Large UCBs can convert themselves into commercial banks in order to minimise the systemic risk.
  • For conversion, smaller UCBs with business size of less than 20,000 crore rupees who are willing to convert to Small Finance Banks can apply to the RBI.
  • Licenses for conversion to operate as UCBs will be issued to well-managed and financially sound cooperative credit societies having a minimum track record of 5-years.
  • With the conversion, UCBs will be allowed to grow and proliferate further to meet the objective of financial inclusion.


  • The High Powered Committee on UCBs was constituted in January 2015 on the recommendation Malegam Committee (Expert Committee on Licensing of New UCBs).
  • Terms and reference of the committee was to examine and recommend on issues of conversion of UCBs into commercial banks. The committee work was to examine permissible business lines and appropriate size of UCBs for conversion purpose.



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