DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : G.Rajeswari
Designation : Senior Lecturer
Branch :Commercial and Computer Practice
Institute : Government Polytechnic, Srikakulam
Year/Semester : V semester
Subject : Banking
Subject code : CCP 504(B)
Topic : Banking, types of banks
Duration :50mts
Sub topic : Co-operative Banks

Teaching Aids : PPT, Animation

CCP504(B).10 1
Co-operative Banks – Features And
Functions

Objectives:

On Completion of this period, you would be

able to:
 Know the features of Co-operative Banks.
 Understand the functions of Co-operative Banks.

CCP504(B).10 2
Introduction:

In India, Commercial Banks and Co-operative

Banks do exist and perform the functions of
banking.
 But there are certain differences between them.
What are they?
 Have you visited to any Co-operative bank?
 Did you find any difference between a
commercial bank and Co-operative Bank?

CCP504(B).10 3
Features of Co-Operative Banks:-

1. The Co-operative bank is a co-operative

organization.
2. It is a voluntary organization.
3. It works on the principle of mutual co-operation and
self-help.

CCP504(B).10 4
Features of Co-Operative Banks:-
1. These banks have been established under the
co-operative societies act.
3. They are private sector banks.
1. These banks have a three tier set up.
2. Co-operative banks function within a given area.
3. Only State Co-operative Banks have access to the
Reserve Bank of India.

CCP504(B).10 5
Features of Co-Operative Banks:-

1. The control of RBI is partial over the Co-operative

banks.

1. Co-operative banks offer a slightly higher rate of

interest.
2. In Co-operative banks borrowers are member-
shareholders.

CCP504(B).10 6
Functions of Co-operative Banks

1. Co-operative banks mobilize savings of the rural

people.
2. They inculcate the habit of thrift and self help.
3. It lends funds to the needy rural people.
4. These banks are basically rural oriented.
5. They give credit to agriculture and allied activities.

CCP504(B).10 7
Differences between co – operative Banks
and commercial Banks

Co-operative Banks Commercial Banks

1) These are governed by the 1) These are governed by the

cooperative societies Act Banking Regulation Act.1949
1904

3) These Banks provide 4) These Banks Generally

short, Medium and long provide short, Medium and
term agricultural and allied long term finance to trade
sectors ,commerce and industry

CCP504(B).10 8
Differences between co – operative Banks and
commercial Banks

Co-operative Banks Commercial Banks

1) Land finance to their 1) Land to any one who is

members only willing to borrow and satisfy
the conditions of the Bank
3) These banks operate on a 2) Their operations are on a
relative small scale Large scale

5) Score of activities is 4) Offers wide range of

limited to providing Financial services
different Types of loans to
their members
CCP504(B).10 9
Differences between co – operative Banks and
commercial Banks

Co – operative banks Commercial Banks

1) Operate as a federal
structure in India
3) Subject to supervision of the
state Governments,
NABARD and RBI
1) The Banks have the
structure of a joint stock
company
2) Directly under the
supervision of RBI

CCP504(B).10 10
Summary

1. The Co-operative Banks were set up under co-

operative society’s act.
2. It is a voluntary association works on the principle of
co-operation and self-help.
3. It gives short and medium term loans to
agriculturists and small business enterprises.
4. Interest rates are slightly higher than the interest
rates of Commercial Banks.

CCP504(B).10 11
 Quiz
1. Co-operative banks play a dominant role in
which type of credit?

A. Rural Credit
B. Urban Credit
C. Car loans
D. Housing loans

CCP504(B).10 12
 Quiz
1. The Co-operative banking system in India is

A. Three tier set up

B. Two tier set up
C. Single tier set up
D. None

CCP504(B).10 13
 Quiz
1. The Co-operative institution which provides
non-agricultural credit is

A. Farmers service society

B. Primary agricultural credit Society
C. Urban Co-operative Banks
D. None of the above

CCP504(B).10 14
Quiz
1. Co-operative banking system in India
follows a pyramid type of three tier
structure for

A. Medium term credit

B. Long term credit
C. Short term credit
D. Both short term and long term credit

CCP504(B).10 15
Frequently asked Questions

1. List any four functions of Co-operative Banks?

3. Mention any four features of Co-operative Banks.

5. Distinguish between co – operative and

Commercial banks

CCP504(B).10 16
Assignment:

Visit any Co-operative Bank and find out the

category to which it belongs? Ask the details about
their activities.

CCP504(B).10 17