Mumbai, Jan. 13 -- The Reserve Bank of India (RBI) on Tuesday released a discussion paper proposing the possible resumption of licensing for new Urban Co-operative Banks (UCBs), ending a pause that has been in place since 2004. The move comes amid significant changes in the regulatory framework and an improvement in the overall financial health of the UCB sector.

"Since 2004, licensing for Urban Co-operative Banks (UCBs) had been paused. Considering the positive developments in the sector during the last two decades and in response to the growing demand from the stakeholders, we propose to publish a discussion paper on licensing of new UCBs," RBI said in a statement.

In its discussion paper titled "Licensing of Urban Co-operative Banks"...