Submitted to:-

prepared by:-

Ms. Reeti Bora Mondal

Aarzoo , Anubhav , Ashwani , Bhawna, Keshav , Tarini

 The presentaion will guide you ,in how to approach

the answers (Great piece of work done by Aarzoo 2nd Shift). For extended study ,find more files attached regarding Cooperative Banks, in addition to notes given from Varshney. I have edited & added few more points.

Reeti Maam

 A co-operative bank is a financial entity which

belongs to its members, who are at the same time the owners and the customers of their bank.
belonging to the same local or professional community or sharing a common interest. Co-operative banks generally provide their members with a wide range of banking and financial services (loans, deposits, banking accounts).

Co-operative banks are often created by persons

 In most countries, they are supervised and controlled

by banking authorities and have to respect prudential banking regulations, which put them at a level playing field with stockholder banks.
In India co-operative banks are regulated with the

RBI and governed by Banking Regulations Act 1949 and Co-operative Societies Act, 1965. These banks were conceived as substitutes for moneylenders

 Co-operative bank forms an integral part of banking system in

India. This bank operates mainly for the benefit of rural area, mobilize deposits and supply agricultural and rural credit with the wider outreach.articularly the agricultural sector. Co-operative bank
They are the main source for the institutional credit to

farmers.
They are chiefly responsible for breaking the monopoly of

moneylenders in providing credit to agriculturists.

 Co-operative bank has also been an important instrument for

various development schemes, particularly subsidy-based programmes for the poor.

Indian banking system. They have extensive branch network and reach out to people in remote areas.
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.

 Co-operative Banks are organised and managed on the principal of

co-operation, self-help, and mutual help.They work on the basis of no profit no loss. Profit maximization is not their goal.

Co-operative bank do banking business mainly in the agriculture

and rural sector. However, UCBs, SCBs, and CCBs operate in semi urban, urban, and metro politan areas also. (CCBs) and Urban Co-operative Banks(UCBs) can normally extend housing loans upto Rs 1lakh to an individual. The scheduled UCBs, however, can lend upto Rs 3 lakh for housing purposes. The UCBs can provide advances against shares and debentures.

The State Co-operative Banks (SCBs), Central Co-operative Banks

 Co-operative bank performs all the main banking functions

of deposit mobilization , supply of credit and provision of remittance facilities.

to the capital market.

are functionally specialists in agriculture related products. However, co-operative banks now provide housing loans also. UCBs provide working capital loans and term loanas well.

 Finance Function:

1. Cooperative banks in India finance rural areas under: Farming Cattle Milk Personal finance

2. Cooperative banks in India finance urban areas under: Self-employment Industries Small scale units Home finance Consumer finance Personal finance

It has been accepted all round that rural co-operative credit movements has not been as successful as was anticipated by sponsors. Despite rapid growth the overall progress of cooperative movement during 100 years of its existence is not very impressive. It is therefore necessary to know the causes of poor Performance of the movement.
One of the important causes for the failure of the movement

was the lack of spontaneity of the movement. the people rarely come forward to organise co-operative societies; on the other hand, the movement is also similar to the form of a government department.

 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, methods of farming, etc.
Finally, intelligent , honest and selfless workers have not

come forward to undertake the responsibilities of the movement. In many cases, rural co-operative banks failed because of the unscrupulousness of the office-bearers.

 It Serves as an apex financing agency for the institutions

providing investment and production credit for promoting the various developmental activities in rural areas. 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.

 while the co-operative banking structure is a three tier

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

 In the organised sector of the Indian money market, co-operative

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

 5. Commercial banks in India are on a larger scale. They have adopted the

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