 DEFINITION

 HISTORY

 INTRODUCTION

 FEATURES

 FUNCTIONS

 CLASSIFICATION

 RECENT DEVELOPMENTS
A co-operative bank is a financial entity which belongs to
its members, who are at the same time the owners and
the customers of their bank. Co-operative banks are often
created by persons belonging to the same local or
professional community or sharing a common interest.
Co-operative banks generally provide their members with
a wide range of banking and financial services (loans,
deposits, banking accounts…). In India co-operative banks
are regulated with the RBI and governed by Banking
Regulations Act 1949 and Co-operative Societies Act, 1965.
The Bank was formed in 1872 in the city Manchester in UK.
The Co-operative banks in INDIA have a history of almost 100
years. The Co-operative banks are an important constituent of
the Indian Financial System. Co operative Banks in India are
registered under the Co-operative Societies Act. The
cooperative bank is also regulated by the RBI. They are
governed by the Banking Regulations Act 1949 and Banking
Laws (Co-operative Societies) Act, 1965. These banks were
conceived as substitutes for money lenders.
Co-operative bank performs all the main banking functions of
deposit mobilisation, supply of credit and provision of remittance
facilities.

Co-operative Banks belong to the money market as well as to

the capital market.

Co-operative Banks provide limited banking products and are

functionally specialists in agriculture related products. However,
co-operative banks now provide housing loans also.

UCBs provide working capital loans and term loan as well.

• Customer-owned entities: In a co-operative bank, the needs of
the customers meet the needs of the owners, as co-operative bank
members are both.

• Democratic member control: Co-operative banks follow the

principle of “one person, one vote”.

• Profit allocation: Profit is usually allocated to members which is

related to the number of shares subscribed by each member.
Co-operative Banks are organised and managed on the
principal of co-operation, self-help, and mutual help. They work
on the basis of “no profit no loss”. Profit maximization is not their goal

Co-operative bank do banking business mainly in the agriculture

and rural sector. However, UCBs, SCBs, and CCBs operate in semi
urban, urban, and metropolitan areas also.

The State Co-operative Banks (SCBs), Central Co-operative Banks

(CCBs) and Urban Co-operative Banks (UCBs) can normally extend
housing loans upto Rs 1 lakh to an individual. The scheduled UCBs,
however, can lend upto Rs 3 lakh for housing purposes. The UCBs can
provide advances against shares and debentures also.
Finance Function:

1. Cooperative banks in India finance rural areas under:

Farming
Cattle
Milk
Personal finance

2. Cooperative banks in India finance urban areas under:

Self-employment
Industries
Small scale units
Home finance
Consumer finance
Personal finance
Some co-operative bank are scheduled banks, while
others are non-scheduled banks. For instance, SCBs and
some UCBs are scheduled banks but other co-operative
bank are non-scheduled banks. At present, 28 SCBs and
11 UCBs with Demand and Time Liabilities over Rs 50
crore. Co-operative Banks are subject to CRR and liquidity
requirements. However, their requirements are less than
commercial banks.
Sr.No. Category of Minimum SLR holding in Government and
bank other approved securities as percentage
of Net Demand and Time Liabilities (NDTL)
1. Scheduled 25%
banks
2. Non-Scheduled
banks
a) with NDTL of
Rs.25 crore & 15%
above
b) with NDTL of
less than Rs.25 10%
crore
Over the years, primary (urban) cooperative banks have
registered a significant growth in number, size and volume of
business handled. As on 31st March, 2003 there were 2,104
UCBs of which 56 were scheduled banks. About 79 percent of
these are located in five states, - Andhra Pradesh, Gujarat,
Karnataka, Maharashtra and Tamil Nadu. According to sources
the total deposits & lendings of Cooperative Banks in India are
much more than Old Private Sector Banks & also the New
Private Sector Banks.
 Amyn K
Charaniya
283065
Rashesh
Jigar Lathia
Sheth
283087
283113

Submitted
Abizer A By: Malcolm
Sabuwala Mascarenhas
283105 283092

Jaydeep K
Binay Roy
Mehta
283104
283094