Reserve Bank of India (RBI) has closed down six Urban Cooperative Banks (UCBs) suspected of being used to route illegal money.

In a meeting of the Economic Intelligence Council (EIC) headed by Finance Minister, it came to notice that the UCBs with deposits of over 2 lakh crore rupees were found to be misused for money laundering. Meanwhile, RBI has asked state governments to take stringent action against the erring UCBs, however it did not disclose the names of the banks.

It observed that the irregularities in the UCBs is of grave nature as there are 8,100-plus branches with deposits worth 2 lakh 9 thousand crore rupees are being used as conduits of money laundering. A senior CEIB official said Gujarat-based UCBs accounts for 161 crore rupees irregularities while Uttar Pradesh 17 crore and 57 lakh rupees.

Government had earlier formed an inter-ministerial group headed by the Director General of Central Economic Intelligence Bureau (CEIB) and comprising members from CBI,Department of Revenue, Department of Financial Services, Financial Intelligence Unit, RBI and Central Board of Direct Taxes (CBDT).