An urban co-operative bank (UCB) is a co-operative society that has also been licensed as a bank, serving members and customers in a town or city. It sits in an unusual regulatory position: it answers to the Reserve Bank of India for its banking business and to a Registrar of Co-operative Societies for its co-operative structure, at the same time.
That dual position was reinforced by the Banking Regulation (Amendment) Act 2020, which brought UCBs and multi-state co-operative banks more fully under RBI's supervisory powers over management, audit, capital and reconstruction, including approval of chief executive appointments. India has roughly 1,482 UCBs plus 58 multi-state co-operative banks covered by that framework. RBI further sorts UCBs into four size tiers by deposits, a distinction covered under UCB tier, which now decides whether a bank may collect pigmy deposits through commission agents at all or only through its own staff.
UCBs are one of the more common places to find a pigmy or daily-deposit scheme, alongside district central co-operative banks, patpedhis and Souharda co-operatives. The distinction that matters most to a depositor is that a UCB, being a licensed bank, carries DICGC deposit insurance up to ₹5,00,000 per depositor. A credit co-operative society that looks similar at the counter, same passbook, same daily collection, is not a bank and is not covered by that insurance, which is the single biggest practical difference between the two.