New Delhi, May 10 :    New Delhi, May 10:  The Union government today shot down the Reserve Bank of India's demand to bring urban cooperative banks under its control and hinted that the Banking Regulation Act will soon be amended to delineate powers of RBI and state registrars of cooperatives. Soon after the Madhavpura Mercantile Cooperative Bank went bust in the pay order scam case, RBI made a demand that such banks should be brought under a single regulatory authority affiliated to it. However, banking secretary Devi Dayal today made it clear that the Centre would amend the existing Act so that there is no overlap between RBI and state registrars. 'Most of the problems are due to this overlap. We will fine tune the Act to delineate the powers of the two sides. This will give RBI more teeth,' Dayal said at a conference on urban cooperative banks held here today. However, RBI deputy governor Jagdish Capoor, who was present at the conference, said the central bank made it clear that these banks would have to adhere to the tighter prudential norms, including higher capital adequacy ratio, from the next fiscal year. Within a period of three to four years they would have to have same norms as other scheduled banks, he added. Capoor also indicated that the high interest rate on deposits currently being offered by many cooperative banks would not be allowed to continue as this could affect their health. 'Sticking to risk and asset liability management norms is important...A working group is evolving guidelines on this,' he said. At present, RBI has the right to dismiss bank boards and appoint administrators in case prudential norms fixed by it are not adhered to and both Capoor and Dayal made it clear that this power could be used to reign in recalcitrant banks. Dayal said the finance minister would soon call a meeting of state chief ministers to discuss the possible amendments to bring about tighter control over these banks. The secretary also made it clear that steps would be taken against some 300 unlicensed urban cooperative banks which were functioning at present. 'If they don't fall in line with banking regulations we will have to take steps to close them down if need be,' Dayal warned.