Once bitten, twice shy. India’s urban cooperative banks (UCBs) have had their share of troubled episodes, regulatory lapses and governance failures, which neither the Government nor the Reserve Bank of India (RBI) afford to overlook.

After keeping UCB licensing on hold for 22 years, the RBI’s decision to revive the process marks a significant shift. But this time, the Government seems determined to put the guardrails in place before allowing the sector to gather momentum.