About Urban Cooperative Banks:
- Urban Cooperative Banks are not formally defined but refer to primary cooperative banks located in urban and semi-urban areas
- History: The first formal co-operative legislation in India came with the Co-operative Credit Societies Act of 1904 (During Lord Curzon’s tenure) and also enacted the more comprehensive Co-operative Societies Act of 1912.
- The first urban cooperative credit society,(Anyonya Sahakari Mandali) was established in 1889 in Baroda.
- Functions: Provide services like housing finance, personal loans, MSME credit, and deposits to small borrowers, traders, and small-scale industries.
- Registration: They are registered as cooperative societies under the provisions of, either the State Cooperative Societies Act of the State concerned or the Multi State Cooperative Societies Act, 2002.
- Regulation: The Reserve Bank regulates and supervises the banking functions of UCBs under the provisions of Banking regulation Act, 1949.
- Banking related functions (viz. licensing, area of operations, interest rates etc.) are to be governed by RBI.
- Registration, management, audit and liquidation, etc. are governed by State Governments as per the provisions of respective State Acts.
- The Reserve Bank has been vested powers to issues licence to UCBs under Section 22 and 23 Banking Regulation Act, 1949 to carry on banking business and to open new places of business(branches, extension counters, etc.) respectively.
