In its efforts to ensure financial inclusion while maintaining fiscal stability, the Reserve Bank of India highlighted the crucial role of the country's urban co-operative banks."(There is a) need for the UCBs to strengthen their financial and operational resilience so as to contribute to the overall financial and banking sector stability," the RBI said in a statement on Wednesday.At an event organised by the central bank for UCBs, RBI Governor Shaktikanta Das and Deputy Governors M. Rajeshwar Rao and Swaminathan Janakiraman spoke to directors on the boards of these lenders.Das highlighted the need for quality governance at UCBs, including a focus on compliance, risk management, and internal audit. He also said that UCBs must adopt a planned strategy for acquiring quality manpower.In India, there are 1,886 co-operative banks, according to RBI data as of June 14, with 1,500 urban co-operative banks and 386 rural cooperative banks.UCBs primarily finance entrepreneurs, small businesses, industries, and self-employment in urban areas, as well as home purchases and educational loans.On credit risk management, the governor underlined the need to uphold robust underwriting standards, effective monitoring of loans, recognising stress on time, ensuring adequate provisioning, and effective recovery mechanisms.While the banking industry has not shied away from adopting technology in its operations, Das cautioned against the use of innovative accounting practices to camouflage the actual financial position."...the role of directors is very significant in ensuring the integrity and transparency of financial statements," the RBI said.In May, at a meeting with directors of universal banks, Das made similar comments.The boards at UCBs must be at the forefront of establishing a strong IT and cybersecurity infrastructure to prevent fraud. According to the data released by the Department of Financial Services, co-operative banks reported 4,135 frauds worth Rs 10,856.7 crore in the last five years, as CNBC reported earlier.A Perfect Storm Has Begun Stifling India's Bank Credit Growth