UCBs Can Now Sell Insurance as Corporate Agents with Lower Net Worth
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2006-2007/376 · issued 07 May 2007 · ~2 min read
Quick answerRBI has lowered the net worth threshold for Urban Co-operative Banks to undertake insurance agency business as corporate agents without risk participation from Rs 50 crore to Rs 10 crore, but only for UCBs registered in MoU-signed states or under the Multi-State Act.
What changed
Earlier, only scheduled UCBs with a minimum net worth of Rs 50 crore could act as corporate agents for insurance. Now, all UCBs (scheduled or not) registered in states that have signed an MoU with RBI or under the Multi-State Co-operative Societies Act, 2002 can do so with a net worth of just Rs 10 crore, provided they are not Grade III or IV. Banks in non-MoU states continue under the old norms.
What it means for you
This opens a fee-based income stream for a much larger set of UCBs, especially smaller ones in compliant states. Banks can now earn commission without taking any insurance risk, which helps diversify revenue beyond lending. However, the benefit is conditional on the state's regulatory cooperation with RBI.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Check if your UCB is registered in a state that has signed an MoU with RBI or under the Multi-State Act.
Ensure your net worth is at least Rs 10 crore and you are not classified as Grade III or IV.
Review and update your insurance agency policy to comply with the new corporate agent norms without risk participation.
Acknowledge receipt of this circular to your respective Regional Office.
Who it affects
All Primary (Urban) Co-operative Banks, UCBs registered in MoU-signed states, Multi-State Co-operative Banks, UCBs with net worth between Rs 10 crore and Rs 50 crore
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 16:56 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn05 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Can a UCB with net worth below Rs 10 crore now sell insurance as a corporate agent?
No. The minimum net worth requirement is Rs 10 crore. Banks below this threshold can only undertake insurance business on a referral basis, as before.
What happens if my UCB is in a state that hasn't signed an MoU with RBI?
Existing norms continue to apply for such banks. That means only scheduled UCBs with Rs 50 crore net worth can act as corporate agents; others can only do referral business.
Does this circular allow risk participation in insurance?
No. The permission is specifically for insurance agency business as corporate agents without risk participation. Banks cannot underwrite insurance risk.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #2443: UBD.PCB.Cir.No.42/09.11.200/06-07 — "Annual Policy Statement for the Year 2007-08 - Undertaking Insurance Business - UCBs" dated May 7, 2007”
📜 Read the original circular — full text as issued by RBI
RBI/2006-2007/376
UBD.PCB.Cir.No. 42 /09.11.200/06-07
May 7, 2007.
The Chief Executive Officer of All
Primary (Urban) Co-operatives Banks.
Dear Sir/Madam
Annual Policy Statement for the Year 2007-08 -
Undertaking Insurance business-UCBs .
Please refer to para 211 of the Annual Policy Statement 2007-08 (copy enclosed).
2. In terms of our circular UBD.BPD.PCB.Cir.No 35/09.112.00/04-05 dated January 24, 2005 , all scheduled UCBs having a minimum net worth of Rs.50 crore were permitted to undertake insurance business as corporate agents. All other UCBs could undertake insurance business on a referral basis, without any risk participation, through their network of branches.
3. It has now been decided to permit UCBs registered in States that have entered into MoUs with the Reserve Bank or registered under the Multi State Co-operative Societies Act, 2002 to undertake insurance agency business as corporate agents without risk participation, subject to compliance with the following eligibility norms:
a) UCB should have a minimum networth of Rs 10 crore,
b) It should not have been classified as Grade III or IV bank.
4. In case of UCBs registered in States which have not signed MoUs with the Reserve Bank existing norms shall continue.
5. All other instructions issued in this regard remain unchanged.
6. Please acknowledge receipt to our Regional Office concerned.
Yours faithfully,
(N.S.Vishwanathan)
Chief General Manager-in-Charge
Annual Policy Statement for the Year 2007-08 -
d) Undertaking Insurance Business
211 . At present, Scheduled UCBs in Grade I with a net worth of not less than Rs.50 crore are permitted to undertake insurance business as corporate agents, without risk participation. Further, all UCBs are allowed to undertake insurance business on referral basis. With a view to providing avenues for fee-based income for a larger number of banks, it is proposed:
• To allow all UCBs in Grade I and II with a net worth of Rs.10 crore and registered in a State that has signed the MoU with the Reserve Bank or under the Multi-State Co-operative Societies Act, to undertake insurance business as corporate agents, without risk participation.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2006-2007/376 · issued 07 May 2007. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=3497&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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