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?

The correct answer is 2 and 3 only.

Let us analyze each of the statements regarding Urban Cooperative Banks (UCBs) in India:

Statement 1: Incorrect
Urban Cooperative Banks are registered as cooperative societies under the respective State Cooperative Societies Act or the Multi-State Cooperative Societies Act. However, their banking functions are supervised and regulated directly by the Reserve Bank of India (RBI). The administrative control lies with the Registrar of Cooperative Societies (RCS) of the state concerned or the Central Registrar of Cooperative Societies (CRCS), not by local boards set up by State Governments. Therefore, statement 1 is incorrect.

Statement 2: Correct
Following the Banking Regulation (Amendment) Act, 2020, Urban Cooperative Banks are allowed to raise capital by issuing equity shares, preference shares, and special shares to their members or any other person residing within their area of operation, subject to RBI approval. Therefore, statement 2 is correct.

Statement 3: Correct
Cooperative banks were brought under the purview of the Banking Regulation Act, 1949 with effect from March 1, 1966, through an amendment passed in 1965 (enforced in 1966). This amendment inserted Section 56 into the Banking Regulation Act to apply its provisions to cooperative societies performing banking activities. Therefore, statement 3 is correct.

Hence, statements 2 and 3 are correct, making 2 and 3 only the correct choice.