Q.State whether the following statement is TRUE or FALSE, and justify your answer:
"An urban co-operative bank works mainly to finance agriculture in villages."

The very name 'urban' points to where a UCB works and whom it serves.

Financing agriculture is the task of the rural co-operative credit structure, not of urban co-operative banks.

The statement is FALSE.

An urban co-operative bank, as its name shows, operates in urban and semi-urban areas — towns and cities and the belts around them. Its members and borrowers are non-agricultural: small traders, artisans, self-employed persons, small industrialists and salaried people. It provides them with deposit facilities and credit for trade, small industry, self-employment and personal needs.

The financing of agriculture in villages is the work of the rural co-operative credit structure — the primary agricultural credit societies at the base, the district central co-operative banks in the middle, and the state co-operative bank at the apex. That structure is studied in the other chapters of this course, and it is quite separate from urban co-operative banking.

A common error is to lump all co-operative banks together. Remember that UCBs form the non-agricultural (urban) structure, distinct from the three-tier rural (agricultural) co-operative credit structure.