gs1medium

With reference to ‘Urban Cooperative Banks’ in India, consider the following statements:

  1. 1.They are supervised and regulated by local boards set up by the State Governments.
  2. 2.They can issue equity shares and preference shares.
  3. 3.They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in

1966.

Which of the statements given above is/are correct?

  1. A.1 only
  2. B.2 and 3 only
  3. C.1 and 3 only
  4. D.1, 2 and 3
▶ Answer & Explanation

Correct answer: B. 2 and 3 only

Urban Cooperative Banks (UCBs) are regulated by the Reserve Bank of India (RBI) under the Banking Regulation Act, 1949, and also by the Registrar of Cooperative Societies (RCS). The Banking Laws (Application) Act, 1966, extended the provisions of the Banking Regulation Act, 1949, to cooperative societies, including UCBs. UCBs, being companies, have the ability to raise capital through the issuance of equity and preference shares, subject to RBI guidelines.

Source: UPSC gs1 2021

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