The correct option regarding Urban Cooperative Banks (UCBs) in India is indeed 2 and 3 only. UCBs can issue equity and preference shares as part of their capital structure, allowing them to raise funds for their operations. They were also brought under the Banking Regulation Act, 1949 through an amendment in 1966, which enhanced their regulatory oversight and operational framework. However, they are supervised and regulated by the Reserve Bank of India (RBI) and not local boards established by State Governments, which makes statement 1 incorrect. This distinction is essential for understanding the governance of cooperative banking in India as it relates to the overall banking sector regulation.