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      Question

      Which of the following recent recommendations regarding

      'Urban Cooperative Banks' (UCBs) was prioritized for strengthening their capital base?
      A Conversion of all UCBs into Small Finance Banks. Correct Answer Incorrect Answer
      B Introduction of a four-tier regulatory framework based on deposit size. Correct Answer Incorrect Answer
      C Allowing UCBs to issue equity shares to the general public on the NSE. Correct Answer Incorrect Answer
      D Abolishing the requirement for a Board of Management. Correct Answer Incorrect Answer

      Solution

      The RBI realized that a "one size fits all" rule doesn't work for cooperative banks. A tiny village bank shouldn't have the same complex rules as a massive multi-state UCB. The 4-tier system allows for proportional regulation—stronger requirements for the big players and simpler, supportive rules for the smaller ones.

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