Q.An urban co-operative bank is subject to dual regulation. The two authorities that regulate it are:

An urban co-operative bank is at once a co-operative society and a bank, so each side of it is controlled by a different authority.

SEBI, the Registrar of Companies and the stock exchange belong to the world of companies and securities, not co-operative banking, so they do not fit.

An urban co-operative bank has a twin character: it is registered as a co-operative society and it carries on banking business. Because of this, two authorities regulate it at the same time — a system called dual regulation or dual control.

Option-by-option analysis:

• (a) SEBI and the Registrar of Companies — Wrong. SEBI regulates the securities market and the Registrar of Companies deals with companies, neither of which governs a co-operative bank.
• (b) The Reserve Bank of India and the Registrar of Co-operative Societies — Correct. The RBI controls the bank's banking side (licence, CRR/SLR, inspection, lending norms) and the Registrar controls its co-operative side (registration, bye-laws, committee, audit, winding-up).
• (c) NABARD and the State Government — Wrong. NABARD refinances rural credit and the State Government is not the bank's day-to-day regulator; the co-operative regulator is the Registrar, an officer under the state's co-operative law.
• (d) The Finance Ministry and the Stock Exchange — Wrong. Neither directly regulates the working of an urban co-operative bank.

Students confuse the co-operative regulator (Registrar of Co-operative Societies) with the Registrar of Companies. The Registrar of Companies has nothing to do with a co-operative bank.