India’s cooperative banks have expanded their combined outstanding loans to INR 11.33 lakh crore as of March 31, 2025—up from INR 7.84 lakh crore just five years prior. The figures, sourced from the Ministry of Cooperation via statements in the Lok Sabha, underscore a dramatic upturn in lending.
Who’s Fueling the Growth
All three tiers in the cooperative banking system saw significant gains. Urban Cooperative Banks (UCBs) raised their lending from INR 3.05 lakh crore in March 2020 to INR 3.68 lakh crore in March 2025. State Cooperative Banks (StCBs) saw a jump from INR 1.99 lakh crore to INR 3.19 lakh crore over the same period, while District Central Cooperative Banks (DCCBs) registered the steepest climb—from INR 2.79 lakh crore to INR 4.44 lakh crore. Notably, the single industrial cooperative bank—Tamil Nadu Industrial Cooperative Bank—reported a loan stock of INR 669 crore.
What’s Behind the Lending Surge
A mix of policy support and structural expansion has propelled this boom. Cooperative banks are benefiting from enhanced loan limits—especially in housing and MSME segments—and access to credit guarantee frameworks. Additional backing from government schemes, like a substantial grant to NCDC and risk-cover under CGTMSE, has enabled these banks to push more credit.
This growth is not limited to sheer numbers; it reflects a deeper transformation in financial inclusion. Aided by digital tools like Aadhaar-enabled onboarding and revised licensing norms, even smaller co-op banks are scaling operations and embracing new borrower categories.