The expert committee on Urban Co-operative Banks was set up on February 2021 under the chairmanship of former Deputy Governor of Reserve Bank of India (RBI), NS Vishwanathan.
 

The expert committee on August 23 submitted its report in two parts. The first part of the report lays out the vision document for the UCBs and the second part talks about the committee’s recommendations on different aspects of strengthening and functioning of UCBs.

The central bank has invited comments from stakeholders till September 30, 2021.

The committee said that the UCBs have the potential to be the harbinger of economic empowerment of a large number of financially excluded persons in the country.

However, the committee noted that the number of borrowers of UCBs is 67 lakh, which is a large number but not in the context of a very large number of persons yet to have access to formal credit.  What has been achieved is not enough either from the standpoint of potential or need.

According to the committee, there are multiple factors resulting in sub-optimal performance of the UCB sector of which some are endogenous and some external.