Looking at various successful federal models existing internationally, especially in Europe and USA, a need was felt for strong inter-cooperative bonding and co-operation and a centralized apex institution that will be in a position to channelize their resources, aggregate their needs and also lend credibility through mutual support in the financial markets.
Besides, the federated model gives options to UCBs to raise capital through subsidiaries etc. The Reserve Bank is examining the prospect of such an arrangement which may further act as a bulwark in crisis situation and strengthen supervision through Self Regulatory Organizations.