RBI Warns Urban Co-operative Banks Over Cyber Risks

Reserve Bank of India Deputy Governor Swaminathan J warned urban co-operative banks (UCBs) that their small physical size and limited branch networks do not insulate them from complex global risks. Speaking at a Mission SAKSHAM programme in Telangana, Swaminathan stated that technology and interconnectedness have decoupled a bank's complexity from its balance sheet, noting that cyber attackers do not distinguish between large and small institutions.

He specifically highlighted the vulnerabilities created by a heavy reliance on third-party providers for data centers, payment applications, and Core Banking Solutions. While acknowledging that outsourcing provides necessary expertise, Swaminathan emphasized that accountability for risk management and service continuity remains with the bank's board and CEO. He cautioned that a failure at a technology service provider could disrupt critical banking services regardless of a bank's geographical boundaries.

To mitigate these threats, the Reserve Bank of India is encouraging more than 1,400 UCBs to adopt shared infrastructure and collective solutions through the National Urban Co-operative Finance and Development Corporation. These efforts are supported by Mission SAKSHAM, an initiative launched on April 28, 2026, which aims to build capabilities for approximately 1.4 lakh participants across the UCB sector.