With reference to 39 Urban Cooperative Banks 39 in India consider the following statements 1 They ar...........

Indian Economic System(BPSC) Money and banking

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

1.They are supervised and regulated by local boards set up by the State Governments.

2.They can issue equity shares and preference shares.

3.They were brought under the purview of the Banking Regulation Act, 1949 through an Amendment in 1966.

How many of the statements given above are correct?

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UPSC CSP Previous Year Paper (2021)

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Explanation:

2 and 3 only

Incorrect :Urban Cooperative Banks (UCBs) are supervised and regulated by both the Reserve Bank of India (RBI) and the respective State Governments. The dual control is exercised based on the Banking Regulation Act, 1949, and the Cooperative Societies Act of the respective states.

Correct After the Banking Regulation (Amendment) Act, 2020, UCBs were allowed to issue equity shares, preference shares, or special shares to their members, or to any other person residing within their area of operation.

Correct UCBs were brought under the purview of the Banking Regulation Act, 1949, through an amendment in 1966. Before this amendment, they were governed only by the respective State Cooperative Societies Act.