Reserve Bank of India (RBI) Governor Sanjay Malhotra announced that the central bank will soon issue draft guidelines for introducing on-tap licensing for Urban Cooperative Banks (UCBs).

The move follows the RBI's decision to end a more than two-decade-long pause on granting new licences to urban cooperative banks, allowing eligible applicants to seek licences on a continuous, or on-tap, basis similar to the framework followed for universal banks.

Malhotra noted that the RBI had released a discussion paper on the proposal in January 2026 and said the central bank will now move ahead with the next phase by issuing the draft regulatory framework.