The Reserve Bank of India (RBI) on Wednesday released draft guidelines for ‘on-tap’ licensing of Urban Co-operative Banks (UCBs), paving the way for fresh banking licences after more than two decades. The central bank has invited comments from stakeholders on the proposed framework till September 5, 2026. Under the draft framework, applications for new UCB licences can be submitted on a continuous (“on-tap”) basis. However, RBI has made it clear that licences will be granted only on a very selective basis, even if applicants meet the prescribed eligibility criteria. In the initial phase, only Multi-State Credit Cooperative Societies registered under the Multi-State Cooperative Societies Act, 2002, will be eligible to apply.