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Ms. Reeti Bora Mondal

Aarzoo , Anubhav , Ashwani , Bhawna, Keshav , Tarini

 I have edited & added few more points.  For extended study .in how to approach the answers (Great piece of work done by Aarzoo 2nd Shift).find more files attached regarding Cooperative Banks. The presentaion will guide you . Reeti M’aam . in addition to notes given from Varshney.

belonging to the same local or professional community or sharing a common interest. A co-operative bank is a financial entity which belongs to its members.  Co-operative banks are often created by persons . Co-operative banks generally provide their members with a wide range of banking and financial services (loans. who are at the same time the owners and the customers of their bank. deposits. banking accounts…).

1965. These banks were conceived as substitutes for moneylenders . which put them at a level playing field with stockholder banks. In most countries.  In India co-operative banks are regulated with the RBI and governed by Banking Regulations Act 1949 and Co-operative Societies Act. they are supervised and controlled by banking authorities and have to respect prudential banking regulations.

Co-operative bank  They are the main source for the institutional credit to farmers.articularly the agricultural sector. mobilize deposits and supply agricultural and rural credit with the wider outreach. This bank operates mainly for the benefit of rural area.  They are chiefly responsible for breaking the monopoly of moneylenders in providing credit to agriculturists. . Co-operative bank forms an integral part of banking system in India.

 They have traditionally played an important role in creating banking habits among the lower and middle income groups and in strengthening the rural credit delivery system. . They have extensive branch network and reach out to people in remote areas.  Co-operative banks constitute an important segment of the Indian banking system. particularly subsidy-based programmes for the poor. Co-operative bank has also been an important instrument for various development schemes.

self-help. however. The scheduled UCBs. The UCBs can provide advances against shares and debentures. SCBs. can lend upto Rs 3 lakh for housing purposes. and mutual help.  The State Co-operative Banks (SCBs). Profit maximization is not their goal. urban. and metro politan areas also. Central Co-operative Banks .They work on the basis of “no profit no loss”. However.  Co-operative bank do banking business mainly in the agriculture and rural sector. and CCBs operate in semi urban. Co-operative Banks are organised and managed on the principal of co-operation. UCBs. (CCBs) and Urban Co-operative Banks(UCBs) can normally extend housing loans upto Rs 1lakh to an individual.

 Co-operative bank performs all the main banking functions of deposit mobilization . supply of credit and provision of remittance facilities.  Co-operative Banks provide limited banking products and are functionally specialists in agriculture related products. . co-operative banks now provide housing loans also.  UCBs provide working capital loans and term loanas well.  Co-operative Banks belong to the money market as well as to the capital market. However.

Cooperative banks in India finance urban areas under:  Self-employment  Industries  Small scale units  Home finance  Consumer finance  Personal finance . Finance Function: 1. Cooperative banks in India finance rural areas under:  Farming  Cattle  Milk  Personal finance 2.

. It is therefore necessary to know the causes of poor Performance of the movement. the people rarely come forward to organise co-operative societies. on the other hand.  One of the important causes for the failure of the movement was the lack of spontaneity of the movement.It has been accepted all round that rural co-operative credit movements has not been as successful as was anticipated by sponsors. the movement is also similar to the form of a government department. Despite rapid growth the overall progress of cooperative movement during 100 years of its existence is not very impressive.

etc. The co-operative banks did not meet all the cash requirements of the farmers. .  The co-operative movement has not touches the other needs of the Indian farmers such as purchase and sale of goods. In many cases. intelligent . rural co-operative banks failed because of the unscrupulousness of the office-bearers.  Finally. methods of farming. honest and selfless workers have not come forward to undertake the responsibilities of the movement.

 It deal directly with the farmer-borrowers. grant short term and medium term loans and also undertake distribution and marketing functions. . loans are basically given for carrying out agricultural operations. It Serves as an apex financing agency for the institutions providing investment and production credit for promoting the various developmental activities in rural areas.

 . works at state level). while the co-operative banking structure is a three tier federal one.  . District Co-operative Banks ltd. works at district level)  .Primary co-operative credit societies at base level (At village level) .The Central Co-operative Bank works at the Intermediate Level.A State Co-operative Bank works at the apex level (ie.(ie.

Commercial banks are joint-stock banks. co-operative      banks and commercial banks are parallel financial institutions. Both render almost identical banking functions of deposit mobilisation. Co-operative banks have lesser scope in offering a variety of banking services than commercial banks. both institutions are distinct in nature. Commercial banks are subject to the control of the Reserve Bank of India directly. 2. Co-operative banks are subject to the rules laid down by the Registrar of Co-operative Societies. . scope and operations. 4. Co-operative banks are governed by the Co-operative Societies Act of 1904. Co-operatives banks. Commercial banks are governed by the Banking Regulation Act. In the organised sector of the Indian money market. on the other hand. We may distinguish between co-operative banks and commercial banks on the following counts: 1. are co-operative organisations. and advancing of loans. Nevertheless. provision of remittance facilities. 3.

Many co-operative banks follow only unit-bank system. Commercial banks. so they cannot have any influence on the lending policy of these banks. Co-operative banks are private sector banks. 9. on account of their voting power. 5. are free from such rigidities . borrowers are member shareholders. Borrowers of commercial banks are only account. trade and commerce. etc. They have adopted the        system of branch banking. Co-operative banks are relatively on a much smaller scale. 7. 10. so they have countrywide operations. Commercial banks mostly provide short-term finance to industry. Co-operative banks have not much scope of flexibility on account of the rigidities of the bye-laws of the Co-operative Societies. though there are cooperative banks with a number of branches but their coverage is not countrywide.holders and have no voting power as such. Commercial banks in India are on a larger scale. Commercial banks in India are of two types: (i) public sector banks and (ii) private sector banks. including priority sectors like exports. 8. so they have some influence on the lending policy of the banks. on the other hand. Co-operative banks usually cater to the credit needs of agriculturists. 6. Co-operative banks offer a slightly higher rate of interest to their depositors than commercial banks. In co-operative banks.

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