The success or the failure of a financial institution mainly depends on the way they effectively collect the funds and efficiently manage those funds in turn to get return. The effective fund management is something like our heart manage the blood circulation throughout the body and have control over the functions. This study examines the sources and applications of funds by cooperative urban banks in India overall. Banks’s performance is measured by the way they raise the funds and how do they manage that fund to increase the efficiency of Bank. Efficiency of bank in financial operations decides their survival level and the long-term objectives of the bank. For the cooperative urban banks, the efficiency of financial operations in their business is interlinked with efficient management of funds which is reflected through the financial margin and is the ultimate financial gain available to them, which are influenced by owned funds to working funds, low-cost deposits to total deposits and balanced credit to deposit ratio. Generally, the Urban cooperative banks works on the principles of cooperation, self-help and mutual help, and even these banks are organized well in terms of their fund management and other financial operations.