Four Co-operative Banks Added to Second Schedule of RBI Act, 1934

The Reserve Bank of India has added four co-operative banks to the Second Schedule of the Reserve Bank of India Act, 1934. The inclusion was carried out through a notification issued on 8 May 2026 and was formally published in the Gazette of India, Part III, Section 4, on 20 May 2026.

The four banks that now find a place in the Second Schedule are Contai Co-operative Bank Limited based in Contai, Prime Co-operative Bank Limited based in Surat, Shri Veershaiv Co-operative Bank Limited based in Kolhapur, and The Varachha Co-operative Bank Limited also based in Surat.

The Second Schedule of the RBI Act is essentially a register of banks that meet a defined set of conditions laid down under Section 42(6)(a) of the Act. A bank listed here is called a Scheduled Bank. To qualify, a bank must satisfy the RBI on parameters such as paid-up capital and reserves, financial position, and conduct of its affairs in the interest of depositors.

Being a Scheduled Bank is more than a formal label. It allows the bank to borrow from the RBI at the bank rate for normal banking business, to take part in clearing house operations, and to be considered for membership of the financial system on a more privileged footing. Scheduled banks are also required to maintain the cash reserve ratio with the RBI as prescribed under the Act.

For co-operative banks, getting onto the Second Schedule is an important milestone. It signals that they have crossed certain size and prudential thresholds and have a credible track record. It also makes them more visible to depositors and improves their access to inter-bank markets.

In the broader context, the move reflects the continuing effort to strengthen and formalise the co-operative banking segment, which has been under closer RBI supervision since amendments to the Banking Regulation Act in 2020 brought urban and multi-state co-operative banks more firmly within the central bank's regulatory perimeter.