Context: In his address at the conference for directors of urban cooperative banks in India, the Reserve Bank of India Governor outlined that the quality of board discussions should be free and frank because the idea of cooperation is based on the idea of democracy.

Democratic Governance in Urban Cooperative Banks In India

• The board members of the Urban cooperative banks in India are elected and the underlying principle of the functioning of the co-operative bank is democracy.
• The board should not be static and there should be new inductions, new minds and younger persons coming into the board.

Also read: Cooperative Societies

Urban Cooperative Banks In India

• Urban Cooperative Banks in India are refers to primary cooperative banks located in urban and semi-urban areas.
• Urban Co-operative Banks in India are play an important role as financial intermediaries in urban and semi-urban areas catering to the needs of the non-agricultural sector, particularly small borrowers.
• Urban co-operative banks come under the supervisory jurisdiction of the Reserve Bank, rural co-operatives are regulated by the NABARD. There is thus no clear demarcation of regulatory powers.

Also read: Types of Banks in India

Regulatory frameworks for Urban Cooperative Banks in India

• Licensing of New Primary (Urban) Cooperative Banks: For starting the banking business, a primary (urban) cooperative bank, as in the case of a commercial bank, is required to obtain a license from the RBI as per the BR Act.
• Licensing of Existing Primary (Urban) Co-operative Banks in India: A primary credit society which would like to become a primary (urban) cooperative bank (by fulfilling the share capital and reserve norms) should avail a license from the RBI.
• Branch Licensing: Primary (urban) cooperative banks in India are required to obtain permission from the RBI to open branches.
• Statutory Provisions: Some of the statutory provisions under the BR Act is also applicable for UCBs, and they will be monitored on the basis of these provisions.