UPSC Prelims 2021 · Question 5 of 97
UPSC Prelims 2021 question on Urban Cooperative Banks
- ExamUPSC CSE
- Year2021
- PaperGeneral Studies Paper I
- SubjectIndian Economy
- TopicBanking
- DifficultyMedium
- TypeStatement
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.
Which of the statements given above is/are correct?
Show answer
Answer: B. 2 and 3 only
Verdict
Correct statements: 2 and 3 → Option (b).
Statement by statement
Statement 1 — INCORRECT: Large cooperative banks were brought under the purview of the Banking Regulation Act, 1949 with effect from 1st March, 1966 and within the ambit of RBI's supervision. The Banking Regulation (Amendment) Act 2020 gives RBI further powers; powers of the registrar of cooperative societies continue but RBI's powers override those of the registrar. UCBs are not supervised by State Government boards.
Statement 2 — CORRECT: The Reserve Bank has given new guidelines allowing primary urban cooperative banks (UCBs) to augment capital through issuance of equity shares, preference shares and debt instruments.
Statement 3 — CORRECT: UCBs were brought under the Banking Regulation Act, 1949 through an Amendment in 1966.