The National Urban Cooperative Finance and Development Corporation aims to bring all urban cooperative banks into its fold this year, enhancing digital services and reducing costs for small lenders amid sector reforms.
The National Urban Cooperative Finance and Development Corporation expects to bring all urban cooperative banks into its fold during the current financial year, as the umbrella institution accelerates a push to cut costs and standardise digital services across the sector. Amit Chaturvedi, chief executive of NUCFDC, said the group was aiming to widen membership from the roughly 1,400 urban cooperative banks it was created to serve and to give smaller lenders access to technology and services they could not easily buy alone.
Chaturvedi told Business Today that scale was central to the model. By aggregating demand from hundreds of small banks, NUCFDC has already been able to reduce prices on some products, including cyber insurance, he said. The corporation’s wider pitch is that banks should be able to plug into a single platform for core banking, payments, compliance and related services rather than negotiating separately with multiple suppliers.
The model is intended to make digital banking more affordable for institutions that often operate on thin margins. According to the report, the services are offered only to registered member banks, and NUCFDC has been working with vendors at sector scale while passing charges through to the supplier as services are used. Any surplus generated by the corporation is returned to urban cooperative banks, which are also its shareholders.
The push comes after the Reserve Bank of India removed the earlier requirement for urban cooperative banks to contribute 0.15% of deposits as capital to meet a mandatory equity threshold of ₹300 crore for NUCFDC, making membership more accessible for smaller lenders. Industry reports have also said the organisation, which has RBI approval to operate as a non-banking finance company and status as a self-regulatory organisation for the sector, is seeking to strengthen the financial and operational resilience of the urban cooperative banking network.
The latest expansion follows a series of digital initiatives unveiled at a Mumbai event on August 8, where Union Home and Cooperation Minister Amit Shah inaugurated NUCFDC’s new office and announced product launches under the umbrella body. Franchise India reported that the corporation has introduced Sahakar Digipay and Sahakar Digiloan to improve payments and lending automation, while Livemint has reported that NUCFDC also plans to ask the RBI to relax digital-service rules for smaller urban cooperative banks with net worth below ₹50 crore. In Maharashtra, meanwhile, a state circular has pushed banks to seek NUCFDC membership, though reactions across the sector have been mixed.
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