NABARD's Digital Leap: Transforming Cooperative Banking by 2025

NABARD Chairman Shaji K V announced plans for digitising cooperative banks by March 2025, enhancing their efficiency. The RBI has mandated the adoption of the Core Banking Solution for these banks. NABARD aims to establish a shared services entity and collaborate with fintechs to modernise rural banking.

NABARD Chairman Shaji K V has projected the digitisation of cooperative banks across India by March 2025. Speaking at a CII event, Shaji highlighted the RBI's directive mandating cooperative banks to adopt the Core Banking Solution, pushing these institutions towards a new era of efficiency and streamlined operations.

In a collaborative effort with the central government, NABARD plans to establish a common shared services entity to support rural cooperatives. This step is poised to foster fintech collaboration, opening doors for fintechs to develop technological solutions that cater to the needs of digitised databases and platforms within the cooperative banking sector.

The strategic shift also involves consolidating Regional Rural Banks (RRBs), a move agreed in principle by the finance ministry. This consolidation aims to reduce the number of RRBs from 43 to 28, enhancing operational efficiency. Key states like Andhra Pradesh, Uttar Pradesh, and West Bengal are set to witness these changes as part of the government's roadmap for a more robust rural banking system.

(With inputs from agencies.)