It has been seen, that Urban Cooperative banks (UCB), have been misused very often due to money laundering. P Chidambaram, the Union finance minister, has pushed solid limitations incorporating scratching off of bank permit of errant banks. These sorts of violations which are done by UCB's are very serious due to their enormous infiltration the nation over.
A huge hindrance in viably regulating UCB's is the duality of control. While RBI directs store mobilization, advance concedes, and so on a majority of the capacities is government-regulated through the multi-state helpful social orders or state agreeable social orders.
UCB's have recently crossed the March 2013 due date set by RBI to finish the procedure of danger categorization other than outfitting a complete record and the different existing customer profiles with them. Another issue that makes it troublesome to capture such illegalities is the RBI hesitance to impart review gives an account of grounds of secrecy.