How much safe is your Co-Operative Bank?

What will happen after you have emergency would like of money from your co-operative savings checking account and suddenly bank curtail your withdrawal or limit it to mere Rs.1, 000 per day?

 This is what happened recently with customers of one native co-operative bank of Bangalore. Therefore, it is important to grasp the chance concerned in banking with such co-operative banks. Before continuing additional allow us to initial perceive what co-operative bank is.

 Co-operative banks area unit little scaled banks that principally operate in rural still, as urban areas of Bharat to cater the banking would like of social teams, man of affairs or little borrowers. Co-operative banks area unit registered beneath the Co-operative Societies Act. They are regulated by tally, banking rules Act 1949 and Banking Laws (Co-operative Societies) Act, 1965. Essentially their area unit 2 styles of Co-operative banks.

Co-Operative Banks Structure:

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 lately, and their business in urban areas in addition has increased phenomenally in recent  years primarily  due  to  the  sharp  increase within the amount 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.

The co-operative banking structure in Republic of India is divided  into short structure  and long  structure. Whereas the short structure  is 3 tier structures, long co-operative banking structure is that the 2 tier structures as mentioned below:

Short-Term Co-operative Bank Structure:

A State Co-operative Bank works at the apex level (i.e. works at state level).The  Central  Co-operative  Bank  works  at  the  Intermediate Level ( i.e., District  Co-operative  Banks  ltd.  works at  district level)Primary  co-operative  credit  societies  at  base  level  (At  village level)

Long-Term Co-operative Bank Structure:

State Co-operative Agriculture and Rural Development Banks (SCARDBs) at the apex level. Primary Co-operative Agriculture   and   Rural   Development Banks (PCARDBs) at the district level or block level.


  1. This Act may be cited as the Co-operative Societies Act.
  2. In this Act-

‘Bonus” means a share of the profits of a registered society divided among its members in proportion to the volume of business done with the society by them from which the profits of the society were derived;

“Committee” means the governing body of a registered society to whom the management of its affairs is entrusted;

“Dividend” means a share of the profits of a registered society divided among its members in proportion to the share capital held by them;

“Member” includes a person or registered society joining in the application for the registration of a society and a person or registered society admitted to membership in accordance with the rules;

“Officer” includes the chairman, secretary, treasurer, member of committee, or other person empowered under the regulations or rules to give directions in regard to the business of a registered society;

“Registered society” means a co-operative society registered under this Act;

“Registrar” means the Registrar of Co-operative Societies appointed under section 3 and includes any person when exercising such powers of the Registrar as may have been conferred upon him under that section;

“Regulations” means regulations made under this Act; “rules” means the registered rules made by a society under this Act.