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National Bank for Agriculture and Rural Development (NABARD) Chairman Shaji K V has said that cooperative banks are expected to be digitised by March 2025 with a view to streamline operations and enhance the efficiency of these financial institutions. The Reserve Bank of India (RBI) has mandated all cooperative banks to adopt the Core Banking Solution (CBS) marking a significant step towards modernisation.

He said NABARD is proposing to set up a common shared services entity across the country for all rural cooperatives. Both government and the RBI have agreed in principle for this entity.  He said ‘we jointly with the central government and cooperative banks will set up a separate company for digital adoption’. This entity will also need lot of fintech collaboration and there are a lot of opportunities for fintechs to partner with both regional rural banks (RRBs) and cooperative banks. As smaller entities, most cooperative banks are currently not able to invest in technology.  

Shaji further said fintechs must look to enhance their focus on the cooperatives sector and RRBs, noting that both are engaging with technology in a larger way. He said there will be ample room for fintechs to devise tech solutions' work on the digitised database and platforms in the two areas of cooperatives and RRBs in the coming days. Observing that RRBs are the middle layer of the banking system in the country, he said these banks are engaging in technology in larger way on account of the intervention of the Department of Financial Services (DFS) in the finance ministry. He added that now, consolidation of RRBs is also being agreed in-principle by the finance ministry and this could lead to a situation of 'One State One RRB’.