Cooperative Banks Show Mixed Trends in Asset Quality

India’s cooperative banks, despite their geographic and operational diversity, lag behind stricter regulatory entities on asset quality parameters. However, their performance varies depending on the regional economies they operate in.
Recent data presented in the Rajya Sabha reveals that states with economically advanced regions tend to have cooperative banks with gross non-performing asset (NPA) ratios below 1%. By contrast, cooperative banks in economically weaker states report higher NPA levels.
The finance ministry reported that 7 state cooperative banks, 424 urban cooperative banks (UCBs), and 120 district central cooperative banks (DCCBs) have gross NPAs exceeding 10%. The data, sourced from regulators such as the Reserve Bank of India (RBI) and NABARD, underscores significant disparities in asset quality across regions.