Certain provisions of the BR Act, however, were not made applicable to them, limiting the scope of regulation and supervision over them1. Broadly speaking, banking-related functions of cooperative banks are regulated by the Reserve Bank and management-related functions are controlled by the concerned State / Central Government. The Reserve Bank’s regulatory control over UCBs is affected due to this duality of control.
RBI has made concerted efforts in the past to mitigate the adverse impact of dual regulation in the form of MoUs with State/ Central Governments and setting up of a Statelevel Task Force for Co-operative Urban Banks (TAFCUB). However, challenges still persist. At present, the Reserve Bank is working with the Government to amend the Act governing cooperative banks.