## Summary of Cooperative Bank Losses and Remedial Measures (Lok Sabha Unstarred Question No. 64, July 21, 2025)
This document summarizes the Government of India's response to Lok Sabha Unstarred Question No. 64 regarding losses incurred by cooperative banks, particularly in backward areas. The response, provided by the Minister of State in the Ministry of Finance, Shri Pankaj Chaudhary, addresses the extent of losses, their causes, administrative expenditures, and actions taken to mitigate these losses. Data provided by the Reserve Bank of India (RBI) and the National Bank for Agriculture and Rural Development (NABARD) is included.
**Key Findings on Losses (FY 2021-2024):**
The annexure provides the number of banks incurring losses, operating expenses, and loss amounts for State Cooperative Banks (StCBs), District Central Cooperative Banks (DCCBs), and Urban Cooperative Banks (UCBs) for fiscal years 2021-22, 2022-23 and 2023-24. Data is available for UCBs for FY 2024-25.
* **StCBs:** The number of StCBs running in loss ranged from 2 to 3. Losses varied, with ₹50.25 crore in FY 2021-22, ₹59.83 crore in FY 2022-23 and ₹35.46 crore in FY 2023-24.
* **DCCBs:** The number of DCCBs running in loss ranged from 39 to 49. DCCB losses were substantial, ranging from ₹996.17 crore (FY 2021-22) to ₹1,403.46 crore (FY 2023-24).
* **UCBs:** The number of UCBs running in loss ranged from 104 to 198. UCB losses ranged from ₹1,194.19 crore (FY 2021-22) to ₹1,468.10 crore (FY 2022-23). For FY 2024-25, 105 UCBs reported losses totaling ₹885.14 crore.
*Data for StCBs and DCCBs for FY 2024-25 is not available.*
**Remedial Measures:**
NABARD has implemented a Turn Around Plan (TAP) to improve the financial performance of StCBs and DCCBs. TAP focuses on:
* Review and monitoring of financial parameters
* Business diversification
* Internal checks and controls
* Governance
* Cost rationalization
* Human resource development
* Technology adoption
* Financial inclusion
RBI has also taken measures to strengthen the financial health of UCBs, including:
* Increased Housing Loan limits for individuals
* Increased lending to remunerative areas in the non-priority sector (up to 40%)
* Relaxation in prudential norms for UCBs, including changes to the definition of small value loans (loans of value not more than ₹25 lakh or 0.4% of Tier I capital, whichever is higher, subject to a ceiling of ₹3 crore per borrower).
Key Entities Referenced
Ministry of Finance: The ministry responsible for financial matters in the Government of India.
Reserve Bank of India: India's central bank, responsible for regulating the banking system.
NABARD: National Bank for Agriculture and Rural Development, an apex development finance institution in India.
State Cooperative Banks: Cooperative banks operating at the state level in India (StCBs).
District Central Cooperative Banks: Cooperative banks operating at the district level in India (DCCBs).
Urban Cooperative Banks: Cooperative banks located in urban areas in India (UCBs).
Turn Around Plan: A plan implemented by NABARD to improve the financial performance of State Cooperative Banks and District Central Cooperative Banks (TAP).
Shri Arun Kumar Sagar: Member of LOK SABHA who raised the question about cooperative banks running in losses.
Government of India
Ministry of Finance
Department of Financial Services
LOK SABHA
Unstarred Question No. 64
ANSWERED ON MONDAY, 21 JULY, 2025/ ASHADHA 30, 1947 (SAKA)
Co-operative Banks Running in Losses
†64. Shri Arun Kumar Sagar:
Will the Minister of FINANCE be pleased to state:
(a) whether a number of co-operative banks, particularly in backward areas, are running in
losses;
(b) if so, the details thereof;
(c) the amount of loss incurred by each of these banks in the last three years and the current
year and the reasons thereof;
(d) the details of the administrative expenditure incurred by these banks during the said period;
and
(e) the action being taken/proposed to be taken to prevent such losses?
Answer
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) to (e): As informed by RBI & NABARD, the details of losses incurred by State Cooperative
Banks (StCBs), District Central Cooperative Banks (DCCBs) and Urban Cooperative Banks
(UCBs) along with operating expenses in the past three financial years is given at Annexure
I. NABARD has implemented the Turn Around Plan (TAP) to improve the financial
performance and prevent/reduce losses in StCBs and DCCBs. TAP aims to reduce financial
losses and improve the overall health of these cooperative banks by adopting a comprehensive
approach which inter-alia includes review and monitoring of financial parameters, business
diversification, internal checks and controls, governance, cost rationalization, human resource
development, technology adoption, financial inclusion, etc.
Further, RBI has also taken several measures to strengthen the financial health of UCBs, which
inter-alia, include:
i. Increased Housing Loan limits for individuals
ii. Increased lending to remunerative areas in non-priority sector also (upto 40%)
iii. Relaxation in prudential norms for UCBs – change in definition of small value loans to
loans of value not more than ₹25 lakh or 0.4 per cent of their Tier I capital, whichever is higher,
subject to a ceiling of ₹3 crore per borrower.
******Annexure I
Statement referred to in part (a) to (e) of Lok Sabha Un-Starred Question No. 64 on
“Co-operative Banks Running in Losses” due for answer on 21.07.2025
Operating
No of banks in Loss amount
Sr No Period Bank Type Expenses
losses (₹ crore)
(₹ crore)
StCBs 3 73.15 -50.25
1 FY 2021-22 DCCBs 49 58030.48 -996.17
UCBs 198 3319.60 -1194.19
StCBs 2 56.75 -59.83
2 FY 2022-23 DCCBs 46 73858.23 -997.91
UCBs 134 4426.01 -1468.10
StCBs 2 55.54 -35.46
3 FY 2023-24 DCCBs 39 80406.16 -1,403.46
UCBs 104 2958.01 -1236.37
4 FY 2024-25* UCBs 105 1714.27 -885.14
* Data for StCBs & DCCBs for FY 2024-25 is not available yet
** Data for Cooperative Banks for current year is not available