Initially set up to supplant indigenous sources of rural credit, particularly money lenders, today they mostly serve the needs of agriculture and allied activities, rural-based industries and to a lesser extent, trade and industry in urban centers. These are allowed to raise deposits and give advances from and to the public. Urban Cooperative Banks are controlled by State government and RBI, while other cooperative banks are controlled by National Bank for Agriculture and Rural Development (NABARD) and State Governments. Except for certain exemptions in paying a higher interest on deposits, the Urban Cooperative Banks regulatory framework is similar to the other banks.
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