Cooperative Banks in India:

The co-operative banks in India have a history of nearly a hundred years.  The co-operative banks square measure a crucial constituent of the Indian economic system, judgment by  their  role appointed  to  them,  the  expectations  they square measure supposed  to  fulfill,  their range,  and  the range  of  offices  they  operate.

The co-operative movement  was  originated  in  the  west, however  the necessary that  such  bank  have  assumed in India  is seldom  paralleled anyplace  else  in the  world.

Their  role  in  rural finance  continues  to  be necessary event these days, and their business in urban areas additionally has enhanced phenomenally in recent  years primarily  due  to  the  sharp  increase  in the quantity of primary co-operative banks.

Co-operative banks in India square measure registered beneath the Co-operative Societies Act.  The co-operative banks square measure additionally  regulated  by  the  Reserve  Bank  of India  (RBI)  and ruled  by  Banking laws  Act 1949 and Banking Laws (Co-operative Societies) Act, 1955.

Co-Operative Bank:

  • 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

Customer-Owned Entities:

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”.

Profit Allocation:

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.

District Co-operative Banks in India

 

District Co-operative Banks (DCBs) occupy the middle level position in the three tier co-operative credit structure of the country. In the beginning of the formation of PACSs, they could not function effectively without gaining financial support from an outside agency. Over and above this, they were in need of technical guidance and administrative support.

 

At the same time, there were some societies which have gained strength and posses surplus funds as well as talents. As a precondition to get mutual help it became necessary that all these primary societies form a federation for ensuring rational use of their funds and provide a common place to meet for exchange of ideas and co-operative experience.

 

The formation of DCBs was thus a felt need for mutual help. The Co-operative Societies Act of 1912 permitted the registration of DCBs. Even before the enactment of this Act, some DCBs were established to cater to the needs of primary societies. In 1906, forerunner of the first DCB was established as a primary society in Uttar Pradesh. At Ajmer in Rajasthan the first DCB was established in 1910. But the first full fledged DCB as per the provisions of the Act of 1912 was started in Jabalpur District of the Central Province.

 

State Co-operative Banks in India

 

The State Co-operative Banks (SCBs) or the apex banks occupy a crucial position in the three tier co-operative credit structure in India. These apex banks or State Co-operative Banks are formed by federating DCBs in each state.

 

The apex banks assume a key-position in the co-operative credit structure because the financial assistance from RBI and the National Bank for Agriculture and Rural Development are invariably routed through them. Table 3.5 presents the key statistics relating to SCBs in India for the period 1975-76 to 1990-91.