<h1>Cooperative banking regulation driving governance and capital reforms to strengthen rural credit delivery and financial inclusion.</h1> Rural cooperative credit institutions have expanded in reach but suffer from legal, structural and governance weaknesses with wide variations in capital adequacy, asset quality and recovery performance. Regulatory reforms have emphasised licensing, phased adoption of Basel I CRAR targets, equalising reserve and SLR requirements with commercial banks, harmonising supervision within RBI, and enabling technology and investment permissions. Repositioning requires implementing governance mandates (professional directors, qualified auditors, fit-and-proper CEOs), improving audit quality and internal controls to prevent frauds, strengthening loan appraisal and recovery, adopting technology with robust risk frameworks, and leveraging PACS-DCCB-StCB infrastructure for financial inclusion.