- A co-operative bank is a money entity that belongs to its members, WHO square measure at the same time the owners and the customers of their bank. Co-operative banks square measure usually created by persons happiness to the same native or skilled community of sharing a common Co-operative banks usually give their members with a wide vary of banking and financial services (loans, deposits, banking accounts, etc.).
- Co-operative banks dissent from stockholders bank by their organization, their goals, their values and their In most countries, they are supervised and controlled by banking authorities and have to respect prudential banking laws, that place them at A level taking part in field with Stock holders banks.
- Depending on countries, this management and superintendence
- Can be enforced directly by state entities or delegated to a co-operative federation or central body. All the co-operative banks share common features as delineate below
In a co- operative bank, the requirements of the customers meet the requirements of householders, as co-operative bank members area unit each i.e. customer and owner.
Democratic Member Control:
Co – operative banks area unit in hand and controlled by the members, World Health Organization democratically elect the board of the directors. Members typically have equal vote rights, consistent with the co-operative principle of “one person, one vote”.
In a co-operative bank, a important half of the yearly profit, advantages or surplus is typically allotted to represent reserves. A half of this profit will additionally be distributed to the co-operative members, with legal and statutory limitations in most cases.
Profit is typically allotted to members either through patronage dividend, that is said to the utilization of co-operative merchandise and services by every member, or through associate degree interest or a dividend, that is connected to the variety of shares signed by every member.