**Executive Summary**
This document is an answer to an unstarred question in Lok Sabha, regarding the establishment and function of the Umbrella Organisation (UO) for Urban Co-operative Banks (UCBs), named the National Urban Co-operative Finance and Development Corporation Limited (NUCFDC). The UO aims to address structural and operational challenges faced by UCBs. The NUCFDC was granted a certificate of Registration on February 8, 2024.
**Key Points / Main Content**
* **Establishment and Purpose:**
* The National Urban Co-operative Finance and Development Corporation Limited (NUCFDC) has been established as the Umbrella Organisation (UO) for Urban Co-operative Banks (UCBs).
* The UO aims to address the structural and operational challenges faced by UCBs.
* **UO Services:**
* The UO provides both fund and non-fund-based services.
* It centralises high-cost and compliance-intensive functions to reduce capital investments and achieve economies of scale for member UCBs.
* Services include capital/liquidity support, loans and advances, refinance facility, IT infrastructure, fund management, consultancy services, capacity building, research & development.
* **NUCFDC Status and Progress:**
* The Reserve Bank of India (RBI) granted NUCFDC a Certificate of Registration as a Non-Banking Financial Company (NBFC) on February 8, 2024.
* NUCFDC has successfully mobilised a minimum regulatory capital of ₹300 crore from UCBs.
* NUCFDC has set up its registered office in New Delhi and its corporate office in Mumbai.
* The UO has started providing non-fund-based services such as cyber insurance, legal advisory, and risk-based internal audit services.
**Impact Analysis**
* **Urban Co-operative Banks (UCBs)**
**Impact**
* UCBs will benefit from reduced capital investments and economies of scale due to the UO's centralisation of high-cost and compliance-intensive functions.
* UCBs will have access to a range of fund and non-fund-based services to address structural and operational challenges.
**Action Required**
* UCBs should engage with the UO (NUCFDC) to leverage the services provided, including capital/liquidity support, IT infrastructure, and consultancy services.
* UCBs should ensure compliance with any requirements or guidelines set by the UO to access its services.
* **Reserve Bank of India (RBI)**
**Impact**
* The RBI plays a role in regulating and overseeing the NUCFDC.
* The establishment and functioning of the NUCFDC may impact the RBI's supervisory responsibilities over UCBs.
**Action Required**
* The RBI needs to continue its oversight of the NUCFDC to ensure compliance with regulatory requirements.
* **Ministry of Finance (Government of India)**
**Impact**
* The establishment of the NUCFDC aligns with the government's objectives for the cooperative banking sector.
* The Ministry of Finance is responsible for answering questions related to the sector in Lok Sabha.
**Action Required**
* The Ministry of Finance should continue to monitor the progress and impact of the NUCFDC on the Urban Co-operative Banks.
Key Entities Referenced
National Urban Co-operative Finance and Development Corporation Limited (NUCFDC): The Umbrella Organisation (UO) for Urban Co-operative Banks (UCBs), established to address challenges faced by UCBs.
Umbrella Organisation of Urban Co-operative Banks: Organisation created to help Urban Co-operative Banks reduce their capital investments and achieve economies of scale.
Reserve Bank of India (RBI): Informed that the UO (NUCFDC) was granted a Certificate of Registration as a Non-Banking Financial Company (NBFC).
Urban Co-operative Banks (UCBs): Banks that are the focus of the umbrella organisation and will receive services.
Ministry of Finance: The ministry under which the matter is being addressed.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. †1384
ANSWERED ON MONDAY, 09 FEBRUARY, 2026/ 20 MAGHA, 1947 (SAKA)
Umbrella Organisation of Urban Co-operative Banks
†1384. DR. BHOLA SINGH:
Will the Minister of FINANCE be pleased to state:
(a) the manner in which the umbrella organisation of Urban Co-operative Banks address the
difficulties being faced by the sector
(b) the activities that can be undertaken by the umbrella organisation in this regard; and
(c) the steps taken for the establishment of the umbrella organisation so far?
ANSWER
THE MINISTER OF STATE IN THE MINISTRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) and (b): The Umbrella Organisation (UO) for Urban Co-operative Banks (UCBs), namely
the National Urban Co-operative Finance and Development Corporation Limited (NUCFDC)
has been set up to address the structural and operational challenges faced by UCBs through
provision of both fund and non-fund-based services. By centralising high-cost and compliance-
intensive functions such as IT infrastructure, cybersecurity, compliance monitoring, training,
risk management, etc., the UO helps its member UCBs to reduce their capital investments and
achieve economies of scale. Major services provided by the UO inter-alia include capital /
liquidity support, loans and advances, refinance facility, IT infrastructure, fund management,
consultancy services, capacity building, research & development, etc.
(c): As informed by Reserve Bank of India (RBI), the UO (NUCFDC) was granted a Certificate
of Registration as a Non-Banking Financial Company (NBFC) by Reserve Bank of India on
February 8, 2024 and NUCFDC has successfully mobilised the minimum regulatory capital of
₹300 crore from UCBs. NUCFDC has set up its registered office in New Delhi and its corporate
office in Mumbai. The UO has started providing certain non-fund-based services such as cyber
insurance, legal advisory, risk based internal audit services, etc. to its member UCBs.
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