Recently, Reserve Bank of India (RBI) imposed restrictions on withdrawals from the Punjab and Maharashtra Cooperative (PMC) Bank, one of the largest urban cooperative lenders. The bank has been barred from granting, renewing and loans and advances, make any investments and accept fresh deposits, without the prior written approval from the RBI. Bank was put under regulatory restriction for a period of six months due to irregularities like fraudulent loans, excessive lending to Housing Development & Infrastructure Ltd (HDIL) etc. After initially encouraging UCBs to spring up all over India for financial  inclusion,  the  RBI  began  to  wake  up  to  their  poor governance from 2005 when it stopped issuing new UCB licenses. Co-operative Banks, which are distinct from commercial banks, were born out of the concept of co-operative credit societies where members from a community group together to extend loans to each other, at favorable terms.Cooperative banks are currently under the dual control of the Registrar of Cooperative Societies and RBI. While the role of registrar of cooperative societies includes incorporation, registration, management, audit, supersession of board and liquidation, RBI is responsible for regulatory functions such maintaining cash reserve and capital adequacy, among others.