The Gujarat Cabinet, chaired by Chief Minister Bhupendra Patel, has given in-principle approval for the formation of nine new District Central Cooperative Banks (DCCBs), marking a significant restructuring of the state’s cooperative banking network. The move aims to align banking infrastructure with Gujarat’s newer districts and improve institutional credit access for farmers and rural communities.
According to state spokesperson and senior minister Jitu Vaghani, the new DCCBs will serve the districts of Dahod, Aravalli, Tapi, Chhota Udepur, Devbhumi Dwarka, Porbandar, Anand, Dang and Navsari, carved out over the years from larger parent districts. Existing DCCBs such as Panchmahal, Sabarkantha, Surat, Vadodara, Jamnagar, Junagadh, Kheda and Valsad will be bifurcated so that each of the new districts receives a dedicated district-level cooperative bank.
National Cooperative Push
The decision is part of a broader national initiative to expand the reach and capacity of rural cooperative banks across all districts of India. Vaghani noted that Prime Minister Narendra Modi has resolved to strengthen cooperative institutions as a pillar of rural development, with Union Home and Cooperation Minister Amit Shah steering a specialised programme under the Ministry of Cooperation.
To operationalise this vision, NABARD prepared an “approach note” recommending the creation of new DCCBs in several districts nationwide, including nine in Gujarat. The Gujarat Cabinet’s approval translates this policy framework into concrete institutional expansion on the ground, aligning state-level cooperative structures with the Centre’s “sahkar se samriddhi” goal of prosperity through cooperation.
What the New Banks Mean for Farmers
Once established, the nine DCCBs are expected to significantly ease access to crop loans, Kisan credit, and allied agricultural finance for small and marginal farmers in remote talukas. Currently, farmers in these newer districts often rely on branches of parent-district banks or commercial lenders located far from their villages, increasing transaction costs and time.
Dedicated DCCBs will enable more localised decision-making, faster loan processing, and tailored products for dairy, horticulture and tribal agriculture, which dominate regions like Dahod, Dang and Chhota Udepur. Cooperative experts argue that a district-focused bank is better placed to understand local cropping patterns, monsoon risks and credit cycles, thereby improving both inclusion and repayment quality.
Implementation Roadmap
The Cabinet’s nod is an in-principle approval; the next step is regulatory clearance. The state government will now submit a detailed proposal to the Reserve Bank of India (RBI) through NABARD, outlining capital structure, governance norms and the bifurcation process for each parent DCCB.
Following RBI approval, legal formalities will be undertaken to register and operationalise each new bank, including board formation, staffing, IT integration and branch network planning. Officials indicate that the transition will be phased to ensure continuity of services for existing cooperative societies and depositors, with clear mapping of which Primary Agricultural Credit Societies (PACS) shift to which new DCCB.
Strengthening Gujarat’s Rural Economy
Cooperative banks have historically been a crucial credit lifeline for Gujarat’s farmers, dairy cooperatives and agri-entrepreneurs, complementing commercial banks and regional rural banks. By creating DCCBs aligned with administrative districts, the state expects to sharpen financial outreach, reduce unbanked rural centres, and support investments in irrigation, storage, and value-addition projects.
Officials believe the decision will encourage more farmers to move away from informal moneylenders towards formal, regulated credit, lowering interest burdens and stabilising rural incomes. In tribal and coastal districts, improved cooperative banking capacity is also expected to enable targeted schemes for fisheries, animal husbandry and forest-based livelihoods.
Expert View and Future Outlook
Cooperative sector observers welcome the move but stress the importance of strong governance, professional management and technology adoption in the new DCCBs. They caution that mere multiplication of banks without adequate supervision, risk management and transparency could dilute financial health and undermine depositor confidence. For in-depth report read here.
NABARD’s recent pilots in Gujarat to strengthen rural cooperative banks—through core banking systems, capacity building, and prudential norms—will likely serve as templates for the new entities. If implemented effectively, the nine new DCCBs could become a model for other states, showcasing how strategic restructuring of cooperative banking can power inclusive growth in rural India.
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