Project

T.Y.
Bcom (Banking & Insurance) Co-operative Banking

CH. 1. INTRO!CTION TO CO-O"#R$TI%#
B$N&IN'
DEFINATION:
($ Co-operative )ank* as its name in+icates is an institution
consisting o, a num)er o, in+ivi+ua-s ./o 0oin toget/er to poo- t/eir surp-us
savings ,or t/e purpose o, e-iminating t/e pro,its o, t/e )ankers or mone1
-en+ers .it/ a vie. to +istri)uting t/e same amongst t/e +epositors an+
)orro.ers.2
T/e Co-operative Banks $ct* o, 3445 (t/e $ct) +e,ines a co-operative
)ank as a co-operative registere+ as a co-operative )ank in terms o, t/e $ct
./ose mem)ers 6
1. are o, simi-ar occupation or pro,ession or ./o are emp-o1e+ )1 a
common emp-o1er or ./o are emp-o1e+ .it/in t/e same )usiness
+istrict7 or
2. /ave common mem)ers/ip in an association or organisation*
inc-u+ing a )usiness* re-igious* socia-* co-operative* -a)our or e+ucationa-
group7 or
3. /ave common mem)ers/ip in an association or organisation*
inc-u+ing a )usiness* re-igious* socia-* co-operative* -a)our or
e+ucationa- group7 or
4. Resi+e .it/in t/e same +e,ine+ communit1 or geograp/ica- area.
Page 1
T.Y.Bcom (Banking & Insurance) Co-operative Banking
CO-OPERTIVE BANKING - AN INTRODUCTION:
Co-operative )ank* in a nuts/e--* provi+es ,inancia- assistance to t/e
peop-e .it/ sma-- means to protect t/em ,rom t/e +e)t trap o, t/e
mone1-en+ers. It is a part o, vast an+ po.er,u- structure o, co-operative
institutions ./ic/ are engage+ in tasks o, pro+uction* processing* marketing*
+istri)ution* servicing an+ )anking in In+ia. $ co-operative )ank is a
,inancia- entit1 ./ic/ )e-ongs to its mem)ers* ./o are at t/e same time t/e
o.ners an+ t/e customers o, t/eir )ank. Co-operative )anks are o,ten
create+ )1 persons )e-onging to t/e same -oca- or pro,essiona- communit1 or
s/aring a common interest. T/ese )anks genera--1 provi+e t/eir mem)ers
.it/ a .i+e range o, )anking an+ ,inancia- services (-oans* +eposits* )anking
accounts8). Co-operative )anks +i,,er ,rom stock/o-+er )anks )1 t/eir
organi9ation* t/eir goa-s* t/eir %a-ues an+ t/eir governance.
T/e Co-operative Banking :1stem in In+ia is c/aracteri9e+ )1 a
re-ative-1 compre/ensive net.ork to t/e grass root -eve-. T/is sector main-1
,ocuses on t/e -oca- popu-ation an+ micro- )anking among mi++-e an+ -o.
income strata o, t/e societ1. T/ese )anks operate main-1 ,or t/e )ene,it o,
rura- areas* particu-ar-1 t/e agricu-tura- sector.
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OBJECTIVES OF STUDY
T/e O)0ective o, t/e stu+1 o, Co-operative Banking is to kno.
t/e origin o, Co-operative Banks in In+ia.
To kno. t/e ro-e o, Co-operative )anks in In+ia.
To kno. t/e importance o, Co-operative Banks in In+ia.
To kno. t/e t1pes o, Co-operative Banks.
To kno. t/e eve-opment o, Co-operative Banks in In+ia.
Page 3
CH. 3. ORI'IN $N O"#R$TION O; CO-
O"#R$TI%# B$N&IN'
ORIGIN OF CO-OPERATIVE BANKING:
T/e )eginning co-operative )anking in In+ia +ates )ack to a)out
1<4=* ./en o,,icia- e,,orts .ere ma+e to create a ne. t1pe o, institution
)ase+ on princip-es o, co-operative organi9ation & management* ./ic/ .ere
consi+ere+ to )e suita)-e ,or so-ving t/e pro)-ems pecu-iar to In+ian
con+itions.
T/e p/i-osop/1 o, e>ua-it1* e>uit1 an+ se-, /e-p gave .a1 to t/e
t/oug/ts o, se-, responsi)i-it1 an+ se-, a+ministration ./ic/ resu-te+ in
giving )irt/ o, co-operative. T/e origin on co-operative movement .as one
suc/ event-arising out o, a situation o, crisis* e?p-oitation an+ su,,erings.
Co-operative )anks in In+ia came into e?istence .it/ t/e enactment o,
t/e $gricu-tura- Cre+it Co-operative :ocieties $ct in 1<4=. Co-operative
)ank ,orm an integra- part o, )anking s1stem in In+ia. !n+er t/e act o, 1<4=*
a num)er o, co-operative cre+it societies .ere starte+. O.ing to t/e
increasing +eman+ o, co-operative cre+it* ane. act .as passe+ in 1<13*
./ic/ .as provi+e+ ,or esta)-is/ment o, co-operative centra- )anks )1 a
union o, primar1 cre+it societies an+ in+ivi+ua-s.
Page 4
Co-operative Banks in In+ia are registere+ un+er t/e Co-operative
:ocieties $ct. T/e cooperative )ank is a-so regu-ate+ )1 t/e RBI. T/e1 are
governe+ )1 t/e Banking Regu-ations $ct 1<=< an+ Banking @a.s (Co-
operative :ocieties) $ct* 1<AB.
OPERATION OF CO-OPERATIVE BANKING:
Estab!s"#$%ts:
Co-operative )ank per,orms a-- t/e main )anking ,unctions o, +eposit
mo)i-isation* supp-1 o, cre+it an+ provision o, remittance ,aci-ities.
Co-operative Banks )e-ong to t/e mone1 market as .e-- as to t/e
capita- market.
Co-operative Banks provi+e -imite+ )anking pro+ucts an+ are
,unctiona--1 specia-ists in agricu-ture re-ate+ pro+ucts. Ho.ever* co-
operative )anks no. provi+e /ousing -oans a-so.
!CBs provi+e .orking capita- -oans an+ term -oan as .e--.
T"$ &"!$' '(%&t!)%s )' C)-)*$+at!,$ ba%-s a+$:
a. To attract +eposit ,rom non-agricu-turist*
Page 5
). To use e?cess ,un+s o, some societies temporari-1 to make up ,or
s/ortage in anot/er*
c. To supervise an+ gui+e a,,i-iate+ societies.
T"$ bas!& *+!%&!*$s )% ."!&" a C)-)*$+at!,$ ba%- .)+-s a+$:
$ co-operative c/aracter o, activities an+ trait o, mutua- ai+
o, cre+it grante+.
Catering ,or co--ective organi9ations an+ t/eir mem)ers.
Restriction on t/e num)er o, in+ivi+ua- votes.

$s a resu-t* +uring 3445-4C* t/e "rimar1 Cooperative
$gricu-ture an+ Rura- eve-opment Banks /ave again starte+ -en+ing ,or t/e
Non-;arm :ector inc-u+ing De.e- @oans.
$iming at /ig/ rates on +eposits an+ -o. rates on -en+ing.
@imitation o, +ivi+en+s out o, pro,its an+ )onus to +epositors
an+ )orro.ers or grants to cu-tura- or co-operative en+eavour.
T/ese )anks are constitute+ o, vo-untar1 association* se-,-/e-p an+
mutua- ai+* one s/are one vote an+ non-+iscrimination an+ e>ua-it1 o,
Page 6
mem)ers. T"$ &)-)*$+at!,$ ba%-s a+$ t"$ )+/a%!0at!)%s )' a%1 ')+ t"$
*$)*$.
CH. E. RO@# O; CO-O"#R$TI%# B$N&IN'
RO2E OF CO-OPERATIVE BANKING IN INDIA:
Co-operative Banks are muc/ more important in In+ia t/an an1./ere
e-se in t/e .or-+. T/e +istinctive c/aracter o, t/is )ank is service at a -o.er
cost an+ service .it/out e?p-oitation. It /as gaine+ its importance )1 t/e ro-e
assigne+ to t/em* t/e e?pectations t/e1 are suppose+ to ,u-,i--* t/eir num)er*
an+ t/e num)er o, o,,ices t/e1 operate. Co-operative )anks ro-e in rura-
,inancing continues to )e important +a1 )1 +a1* an+ t/eir )usiness in t/e
ur)an areas a-so /as increase+ p/enomena--1 in recent 1ears main-1 +ue to
t/e s/arp increase in t/e num)er o, primar1 co-operative )anks. In rura-
areas* as ,ar as t/e agricu-tura- an+ re-ate+ activities are concerne+* t/e
supp-1 o, cre+it .as ina+e>uate* an+ mone1 -en+ers .ou-+ e?p-oit t/e poor
peop-e in rura- areas provi+ing t/em -oans at /ig/er rates. :o* Co-operative
)anks mo)i-i9e +eposits an+ purve1 agricu-tura- an+ rura- cre+it .it/ a .i+er
outreac/ an+ provi+e institutiona- cre+it to t/e ,armers. Co-operative )ank
/ave a-so )een an important instrument ,or various +eve-opment sc/emes*
particu-ar-1 su)si+1-)ase+ programmes ,or poor.
T/e Co-operative )anks in +(+a a+$as main-1 ,inance agricu-tura-
)ase+ activities -ikeF

Page 7
;arming
Catt-e
Gi-k
Hatc/er1
"ersona- ,inance
T/e Co-operative )anks in (+ba% a+$as ,inance in activities -ikeF
:e-,-emp-o1ment
In+ustries
:ma-- sca-e units
Home ,inance
Consumer ,inance
"ersona- ,inance
:ome o, t/e ,or.ar+ -ooking Co-operative )anks /ave +eve-ope+
su,,icient core competencies to suc/ an e?tent t/at t/e1 are a)-e to c/a--enge
state an+ private sector )anks.
T/e e?ponentia- gro.t/ o, Co-operative )anks is attri)ute+ main-1 to
t/eir muc/ )etter contacts .it/ t/e -oca- peop-e* persona- interaction .it/
customers* an+ t/eir a)i-it1 to catc/ t/e nerve o, t/e -oca- c-iente-e. T/e tota-
+eposits an+ -en+ings o, Co-operative )anks are muc/ more t/an t/e O-+
"rivate :ector Banks an+ t/e Ne. "rivate :ector Banks.
Page 8
I3PORTANCE OF CO-OPERATIVE BANKING
Co-operative )ank ,orms an integra- part o, )anking s1stem in In+ia.
T/is )ank operates main-1 ,or t/e )ene,it o, rura- area* particu-ar-1 t/e
agricu-tura- sector. Co-operative )ank mo)i-i9e +eposits an+ supp-1
agricu-tura- an+ rura- cre+it .it/ t/e .i+er outreac/. T/e1 are t/e main
source ,or t/e institutiona- cre+it to ,armers. T/e1 are c/ie,-1 responsi)-e ,or
)reaking t/e monopo-1 o, mone1-en+ers in provi+ing cre+it to agricu-turists.
Co-operative )ank /as a-so )een an important instrument ,or various
+eve-opment sc/emes* particu-ar-1 su)si+1-)ase+ programmes ,or t/e poor.
Co-operative )anks operate ,or non-agricu-tura- sector a-so )ut t/eir ro-e is
sma--.
T/oug/ muc/ sma--er as compare+ to sc/e+u-e+ commercia- )anks*
co-operative )anks constitute an important segment o, t/e In+ian )anking
s1stem. T/e1 /ave e?tensive )ranc/ net.ork an+ reac/ out to peop-e in
remote areas. T/e1 /ave tra+itiona--1 p-a1e+ an important ro-e in creating
)anking /a)its among t/e -o.er an+ mi++-e income groups an+ in
strengt/ening t/e rura- cre+it +e-iver1 s1stem.
Page 9
CH. =. HI:TORY O; CO-O"#R$TI%# B$N&IN'
4ISTORY OF CO-OPERATIVE BANKING
T/e origins o, t/e cooperative )anking movement in In+ia can )e
trace+ to t/e c-ose o, nineteent/ centur1 ./en* inspire+ )1 t/e success o, t/e
e?periments re-ate+ to t/e cooperative movement in Britain an+ t/e
cooperative cre+it movement in 'erman1* suc/ societies .ere set up in
In+ia.
No.* Co-operative movement is >uite .e-- esta)-is/e+ in In+ia. T/e
,irst -egis-ation on co-operation .as passe+ in 1<4=. In 1<1= t/e Gac-agen
committee envisage+ a t/ree tier structure ,or co-operative )anking vi9.
"rimar1 $gricu-tura- Cre+it :ocieties ("$Cs) at t/e grass root -eve-* Centra-
Co-operative Banks at t/e +istrict -eve- an+ :tate Co-operative Banks at
state -eve- or $pe? @eve-.
In t/e )eginning o, 34t/ centur1* avai-a)i-it1 o, cre+it in In+ia* more
particu-ar-1 in rura- areas* .as a-most a)sent. $gricu-tura- an+ re-ate+
activities .ere starve+ o, organise+* institutiona- cre+it. T/e rura- ,o-k /a+ to
+epen+ entire-1 on t/e mone1 -en+ers* ./o -ent o,ten at usurious rates o,
interest.
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10
T/e co-operative )anks arrive+ in In+ia in t/e )eginning o, 34t/
Centur1 as an o,,icia- e,,ort to create a ne. t1pe o, institution )ase+ on t/e
princip-es o, co-operative organisation an+ management* suita)-e ,or
pro)-ems pecu-iar to In+ian con+itions. T/ese )anks .ere conceive+ as
su)stitutes ,or mone1 -en+ers* to provi+e time-1 an+ a+e>uate s/ort-term an+
-ong-term institutiona- cre+it at reasona)-e rates o, interest.
T/e $n1on1a Co-operative Bank in In+ia is consi+ere+ to /ave )een
t/e ,irst co-operative )ank in $sia ./ic/ .as ,orme+ near-1 144 1ears )ack
in Baro+a. It .as esta)-is/e+ in 1CC< .it/ t/e name A%5)%5a Sa"a5a-a+!
3a%1a! C)-)*$+at!,$ Ba%- 2!#!t$1* .it/ a primar1 o)0ective o,
provi+ing an a-ternative to e?p-oitation )1 mone1-en+ers ,or Baro+aHs
resi+ents.

In t/e ,ormative stage Co-operative Banks .ere !r)an Co-operative
:ocieties run on communit1 )asis an+ t/eir -en+ing activities .ere restricte+
to meeting t/e cre+it re>uirements o, t/eir mem)ers. T/e concept o, !r)an
Co-operative Bank .as ,irst spe-t out )1 Ge/ta B/ansa-i Committee in 1<E<
./ic/ +e,ine+ on !r)an Co-operative Bank . "rovisions o, :ection B (CC%)
o, Banking Regu-ation $ct* 1<=< (as app-ica)-e to Co-operative :ocieties)
+e,ine+ an !r)an Co-operative Bank as a "rimar1 Co-operative Bank ot/er
t/an a "rimar1 Co-operative :ociet1 .ere ma+e app-ica)-e in 1<AA.
Iit/ gra+ua- gro.t/ an+ a-so given p/i-ip .it/ t/e economic )oom*
ur)an )anking sector receive+ tremen+ous )oost an+ starte+ +iversi,1ing its
cre+it port,o-io. Besi+es giving tra+itiona- -en+ing activit1 meeting t/e cre+it
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11
re>uirements o, t/eir customers t/e1 starte+ catering to various sorts o,
customers vi9.se-,-emp-o1e+* sma-- )usinessmen J in+ustries* /ouse ,inance*
consumer ,inance* persona- ,inance etc.
CH. B. ;#$T!R#: O; CO-O"#R$TI%# B$N&IN'
FEATURES OF CO-OPERATIVE BANKING
1.Co-operative Banks are organi9e+ an+ manage+ on t/e principa- o, co-
operation* se-,-/e-p* an+ mutua- /e-p. T/e1 ,unction .it/ t/e ru-e o, Kone
mem)er* one voteK. ,unction on Kno pro,it* no -ossK )asis. Co-operative
)anks* as a princip-e* +o not pursue t/e goa- o, pro,it ma?imi9ation.
3. Co-operative )ank per,orms a-- t/e main )anking ,unctions o, +eposit
mo)i-isation* supp-1 o, cre+it an+ provision o, remittance ,aci-ities.
E. Co-operative Banks provi+e -imite+ )anking pro+ucts an+ are ,unctiona--1
specia-ists in agricu-ture re-ate+ pro+ucts. Ho.ever* co-operative )anks no.
provi+e /ousing -oans a-so.
=. Co-operative )anks are per/aps t/e ,irst government sponsore+*
government-supporte+* an+ government-su)si+ise+ ,inancia- agenc1 in
In+ia. T/e1 get ,inancia- an+ ot/er /e-p ,rom t/e Reserve Bank o, In+ia*
N$B$R* centra- government an+ state governments. T/e1 constitute t/e
Kmost ,avoure+K )anking sector .it/ risk o, nationa-isation. ;or
commercia- )anks* t/e Reserve Bank o, In+ia is -en+er o, -ast resort* )ut
co-operative )anks it is t/e -en+er o, ,irst resort ./ic/ provi+es ,inancia-
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12
resources in t/e ,orm o, contri)ution to t/e initia- capita- (t/roug/ state
government)* .orking capita-* re,inance.
B. Co-operative Banks )e-ong to t/e mone1 market as .e-- as to t/e capita-
market. "rimar1 agricu-tura- cre+it societies provi+e s/ort term an+ me+ium
term -oans.
A. Co-operative )anks are ,inancia- interme+iaries on-1 partia--1.
T/e sources o, t/eir ,un+s (resources) areF
(a) Centra- an+ state government*
()) T/e Reserve Bank o, In+ia an+ N$B$R*
(c) Ot/er co-operative institutions*
(+) O.ners/ip ,un+s an+*
(e) eposits or +e)enture issues.
5. :ome co-operative )ank are sc/e+u-e+ )anks* ./i-e ot/ers are non-
sc/e+u-e+ )anks. Co-operative Banks are su)0ect to CRR an+ -i>ui+it1
re>uirements as ot/er sc/e+u-e+ an+ non-sc/e+u-e+ )anks are. Ho.ever*
t/eir re>uirements are -ess t/an commercia- )anks.
C. $s sai+ ear-ier* co-operative )anks accept current* saving* an+ ,i?e+ or
time +eposits ,rom in+ivi+ua-s an+ institutions inc-u+ing )anks.
<. In t/e recent past* t/e RBI /as intro+uce+ c/anges in interest rates o, co-
operative )anks a-so* a-ong .it/ c/anges in interest rates o, commercia-
)anks. T/e interest rates structure o, co-operative )anks is >uite comp-e?.
T/e rates c/arge+ )1 t/em +epen+ upon t/e t1pe o, )ank* t/e t1pe o, -oans*
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13
an+ var1 ,rom state to state.
14. :ince 1<AA t/e -en+ing an+ +eposit rate o, commercia- )anks /ave )een
+irect-1 regu-ate+ )1 t/e Reserve Bank o, In+ia. $-t/oug/ t/e Reserve Bank
o, In+ia /a+ po.er to regu-ate t/e rate co-operative )ank )ut t/is /ave )een
e?ercise+ on-1 a,ter 1<5< in respect o, non-agricu-tura- a+vances t/e1 .ere
,ree to c/arge an1 rates at t/eir +iscretion. $-t/oug/ t/e main aim o, t/e co-
operative )ank is to provi+e c/eaper cre+it to t/eir mem)ers an+ not to
ma?imi9e pro,its* t/e1 ma1 access t/e mone1 market to improve t/eir
income so as to remain via)-e.
11. Co-operative )anks (COBs)* in s/ort* /ave p-a1e+ a pivota- ro-e in t/e
+eve-opment o, s/ort-term an+ -ong-term rura- cre+it structure in In+ia over
t/e 1ears. T/e co-operative cre+it e,,ort is sai+ to )e t/e ,irst ever attempt at
micro-cre+it +ispensation in In+ia.
C)-)*$+at!,$ Ba%-s s"a+$ s)#$ &)##)% '$at(+$s ')+ t"$!+
&(st)#$+ b$%$'!t:
C(st)#$+6s ).%$1 $%t!t!$s F
In a co-operative )ank* t/e nee+s o, t/e customers meet t/e nee+s o,
t/e o.ners* as co-operative )ank mem)ers are )ot/. $s a
conse>uence* t/e ,irst aim o, a co-operative )ank is not to ma?imise
pro,it )ut to provi+e t/e )est possi)-e pro+ucts an+ services to its
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14
mem)ers. :ome co-operative )anks on-1 operate .it/ t/eir mem)ers
)ut most o, t/em a-so a+mit non-mem)er c-ients to )ene,it ,rom t/eir
)anking an+ ,inancia- services.
D$#)&+at!& #$#b$+ &)%t+) F
Co-operative )anks are o.ne+ an+ contro--e+ )1 t/eir mem)ers* ./o
+emocratica--1 e-ect t/e )oar+ o, +irectors. Gem)ers usua--1 /ave
e>ua- voting rig/ts* accor+ing to t/e co-operative princip-e o, Kone
person* one voteK.
P+)'! a)&at!)% F
In a co-operative )ank* a signi,icant part o, t/e 1ear-1 pro,it* )ene,its
or surp-us is usua--1 a--ocate+ to constitute reserves. $ part o, t/is
pro,it can a-so )e +istri)ute+ to t/e co-operative mem)ers* .it/ -ega-
or statutor1 -imitations in most cases. "ro,it is usua--1 a--ocate+ to
mem)ers eit/er t/roug/ a patronage +ivi+en+* ./ic/ is re-ate+ to t/e
use o, t/e co-operativeHs pro+ucts an+ services )1 eac/ mem)er* or
t/roug/ an interest or a +ivi+en+* ./ic/ is re-ate+ to t/e num)er o,
s/ares su)scri)e+ )1 eac/ mem)er.
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15
CH. A. TYPES OF CO-OPERATIVE BANKS
TYPES OF CO-OPERATIVE BANKS
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16
C2ASSIFICATION OF CO-PERATIVE BANKS:
T/e Co-operative )anking structure in In+ia comprises o,F
1. !r)an Co-operative Banks
3. Rura- Co-operatives
:ome co-operative )anks are sc/e+u-e+ )anks* ./i-e ot/ers are non-
sc/e+u-e+ )anks. ;or instance* :tate Co-operative )anks an+ some !r)an
Co-operative )anks are sc/e+u-e+ )anks )ut ot/er co-operative )anks are
non-sc/e+u-e+ )anks.
:c/e+u-e+ )anks are t/ose )anks ./ic/ /ave )een inc-u+e+ in t/e
secon+ sc/e+u-e o, t/e Reserve )ank o, In+ia act o, 1<E=.
T"$ ba%-s !%&(1$1 !% t"!s s&"$1($ !st s")(1 '('! t.) &)%1!t!)%s.
1. T/e pai+ capita- an+ co--ecte+ ,un+s o, )ank s/ou-+ not )e -ess t/an Rs. B
-ac.
3.$n1 activit1 o, t/e )ank .i-- not a+verse-1 a,,ect t/e interests o,
+epositors.
E,$+5 S&"$1($1 ba%- $%7)5s t"$ ')).!%/ 'a&!!t!$s.
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17
1. :uc/ )ank )ecomes e-igi)-e ,or +e)tsJ-oans on )ank rate ,rom t/e RBI
3. :uc/ )ank automatica--1 ac>uire t/e mem)ers/ip o, c-earing /ouse.
1. U+ba% C)-)*$+at!,$ Ba%-s:
!r)an Co-operative Banks is a-so re,erre+ as "rimar1 Co-operative
)anks )1 t/e Reserve Bank o, In+ia. $mong t/e non-agricu-tura- cre+it
societies ur)an co-operative )anks occup1 an important p-ace. T/is )ank is
starte+ in In+ia .it/ t/e o)0ect o, catering to t/e )anking an+ cre+it
re>uirements o, t/e ur)an mi++-e c-asses.
T/e RBI +e,ines !r)an Co-operative )anks as (sma-- si9e+ co-
operative-1 organi9e+ )anking units ./ic/ operate in metropo-itan* ur)an
an+ semi-ur)an centers to cater main-1 to t/e nee+s o, sma-- )orro.ers* vi9.
o.ners o, sma-- sca-e in+ustria- units* retai- tra+ers* pro,essiona- an+ sa-aries
c-asses.2
!r)an Co-operative )anks mo)i-i9e savings ,rom t/e mi++-e an+
-o.er income groups an+ purve1 cre+it to sma-- )orro.ers* inc-u+ing .eaker
sections o, t/e societ1. T/ese )anks organi9e on a -imite+ -ia)i-it1 )asis*
genera--1 e?ten+ t/eir area o, operation over a to.n. T/e main ,unctions o,
t/ese )anks are to promote t/ri,t )1 attracting +eposits ,rom mem)ers an+
non-mem)ers an+ to a+vance -oans to t/e mem)ers. It is registere+ un+er
Co-operatives :ocieties $ct o, t/e respective state 'overnments. "rior to
1<AA* !r)an Co-operative )anks .ere e?c-usive-1 un+er t/e purvie. o,
:tate 'overnment. ;rom Garc/ 1* 1<AA certain provisions o, Banking
Regu-ation $ct /ave )een ma+e app-ica)-e to t/ese )anks. Conse>uent-1* t/e
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18
RBI )ecame t/e regu-ator1 an supervisor1 aut/orit1 o, !r)an Co-operative
Banks ,or t/eir re-ate+ operations. Ganageria- aspects o, suc/ )anks
continue to remain .it/ :tate 'overnments un+er t/e respective Co-
operative :ocieties $ct. T/ese )anks .it/ mu-ti-presence are regu-ate+ )1
t/e Centra- 'overnments an+ registere+ un+er Gu-ti-:tate Co-operative
:ocieties $ct. T/e RBI e?ten+s re,inance to !r)an Co-operative Banks at
)ank ate against t/eir a+vances to tin1 an+ cottage in+ustria- units. T/ese
)anks grants si9ea)-e -oans an+ a+vances un+er priorit1 sector ,or -en+ing to
sma-- )usiness enterprises* retai- tra+e* roa+ an+ .ater transport operators
an+ pro,essiona- an+ se-,-emp-o1e+ persons. !r)an Co-operative )anks are
most-1 -ocate+ in to.ns an+ cities an+ cater to t/e cre+it re>uirement o, t/e
ur)an c-iente-e.
T"$ )b7$&t!,$s a%1 '(%&t!)%s )' t"$ U+ba% C)-)*$+at!,$ ba%-s:

"rimari-1* to raise ,un+s ,or -en+ing mone1 to its mem)ers.
To attract +eposits ,rom mem)ers as .e-- as non-mem)ers.
To encourage t/ri,t* se-,-/e-p a+ mutua- ai+ among mem)ers.
To +ra.* make* accept* +iscount* )u1* se--* co--ect an+ +ea- in )i--s o,
e?c/ange* +ra,ts* certi,icates an+ ot/er securities.
To provi+e sa,e-+eposit vau-ts.
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19
A+$a )' O*$+at!)% :
T/e area o, operation o, t/ese )anks are usua--1 restricte+ )1 its
)1e-a.s to a municipa- area or a to.n. In some occasions it e?cee+s t/is
-imit. T/e stu+1 group on Cre+it Co-operatives in Non-$gricu-tura- :ectors
/as recommen+e+ t/at norma--1* it .ou-+ )e a+visa)-e ,or an ur)an co-
operative )ank to restrict its area o, operation to t/e municipa-it1 or t/e
ta-uka to.n ./ere it operates.
2. R(+a C)-)*$+at!,$s:
Rura- Cooperative Banking p-a1s an important ro-e in meeting t/e
gro.ing cre+it nee+s o, rura- popu-ation o, In+ia. It provi+es institutiona-
cre+it to t/e agricu-tura- an+ rura- sector. T/e ina+e>uac1 o, rura- cre+it
engage+ t/e attention o, RBI an+ 'overnment t/roug/out t/e 1<B4s an+
1<A4s. One important ,eature o, provi+ing agricu-ture cre+it in In+ia /as
)een t/e e?istence o, a .i+esprea+ net.ork o, rura- ,inancia- institutions.
T/e rura- cre+it structure consists o, man1 t1pes o, ,inancia- institutions as
-arge sca-e )ranc/ e?pansion .as un+ertaken to create a strong institution
)ase+ in rura- area. It /as serve+ as an important instrument o, cre+it
+e-iver1 in rura- an+ agricu-tura- areas. T/e separate structure o, rura- Co-
operative sector ,or -ong-term an+ s/ort-term -oans /as ena)-e+ t/ese
institutions to +eve-op a specia-i9e+ institution ,or rura- cre+it +e-iver1. T/e
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20
vo-ume o, cre+it ,-o.ing t/roug/ t/ese institution /as increase+. T/e Rura-
Co-operative structure /as tra+itiona--1 )een )i,urcate+ into t.o para--e-
.ings* i.e.
I. :/ort-term Rura- Co-operatives*
II. @ong-term Rura- Co-operatives.
T/ere is a -arger net.ork o, co-operative )anks in t/e rura- sector*
consisting o, 3< :tate Co-operative Banks an+ EA5 istrict Centra- Co-
operative Banks* .it/ 1E*43B )ranc/es. In a++ition* t/ere are <3*444 "rimar1
$gricu-tura- Co-operative Cre+it :ocieties * 1< :tate @an+ eve-opment
Banks an+ 5=B "rimar1 @an+ eve-opment Banks* a-ong .it/ 1*C=5
)ranc/es* ./ic/ are not strict-1 )anks as t/e1 are not covere+ un+er t/e
Banking Regu-ation $ct* 1<=<. T/e RBI 'overnorHs proposa-s s/ou-+*
t/ere,ore* encompass t/e entire Co-operative )anking s1stem.
I. S")+t-t$+# R(+a C)-)*$+at!,$s:
T/e s/ort-term rura- co-operatives provi+e crop an+ ot/er .orking
capita- -oans to ,armers an+ rura- artisans primari-1 ,or s/ort-term purpose.
T/ese institutions /ave ,e+era- t/ree-tier structure.
$t t/e $pe? o, t/e s1stem is a :tate Co-operative )ank in eac/ state.
$t t/e mi++-e (or +istrict) -eve-* t/ere are Centra- Co-operative Banks
a-so kno.n as istrict Co-operative )anks.
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21
$t t/e -o.est (or vi--age) -eve-* are t/e "rimar1 $gricu-tura- Cre+it
:ocieties.
i. :tate Co-operative BanksF
:tate Co-operative Banks are t/e ape? o, t/e t/ree-tier
Co-operative structure +ispensing main-1 s/ortJme+ium term cre+it. It is t/e
principa- societ1 in a :tate ./ic/ is registere+ or +eeme+ to )e registere+
un+er t/e 'overnment :ocieties $ct* 1<13* or an1 ot/er -a. ,or t/e time
)eing in ,orce in In+ia re-ating to co-operative societies an+ t/e primar1
o)0ect o, ./ic/ is t/e ,inancing o, t/e ot/er societies in t/e :tate ./ic/ are
registere+ or +eeme+ to )e registere+. T/e :tate Co-operative Banks receive
current an+ ,i?e+ +eposits ,rom its constituent )anks as .e-- as savings*
current an+ ,i?e+ +eposits ,rom t/e genera- pu)-ic an+ ,rom -oca- )oar+s*
ot/er -oca- aut/orities* etc. ;urt/er* t/e1 receive -oans ,rom t/e RBI an+
N$B$R. N$B$R is t/e supervisor1 aut/orit1 ,or :tate Co-operative
Banks. T/e state government contri)utes t/e certain portion o, t/eir .orking
capita-. T/e principa- ,unction o, :tate Co-operative Banks is to assist t/e
Centra- Co-operative Banks an+ to )a-ance e?cesses an+ +e,iciencies in t/e
resources o, Centra- Co-operative Banks. It a-so act as t/e ()a-ancing
centre2 ,or Centra- Co-operative Banks in t/e sense t/at surp-us ,un+ o,
some o, t/ese )anks are ma+e avai-a)-e to ot/er nee+1 )anks. It a-so serves
t/e -ink )et.een RBI an+ t/e Centra- Co-operative Banks an+ "rimar1
$gricu-ture Cre+it :ocieties. But t/e connection )et.een t/e :tate Co-
operative Banks an+ "rimar1 Co-operative :ocieties is not +irect. T/e
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22
Centra- Co-operative Banks are acting as interme+iaries )et.een t/e :tate
Co-operative Banks an+ "rimar1 societies.
ii. Centra- Co-operative BanksF
Centra- Co-operative Banks ,orm t/e mi++-e tier o, Co-
operative cre+it institutions. T/ese are t/e in+epen+ent units in as muc/ as
t/e :tate Co-operative Banks /ave contro- to contro- or supervise t/eir
a,,airs. T/e1 are o, t.o kin+s i.e. LpureM an+ Lmi?e+M. T/ose )anks are t/e
mem)ers/ip o, ./ic/ is con,ine+ to co-operative organi9ations on-1 are
inc-u+e+ in LpureM t1pe* ./i-e t/ose )anks t/e mem)ers/ip o, ./ic/ is open
to co-operative organi9ations as .e-- as to t/e in+ivi+ua-s are inc-u+e+ in
Lmi?e+M t1pe. T/e pure t1pe o, Centra- Banks can )e seen in &era-a*
Bom)a1* Orissa* etc.* ./i-e t/e mi?e+ t1pe can )e seen in $n+/ra "ra+es/*
$ssam* Tami- Na+u* etc. T/e pure t1pe o, )anks is )ase+ on strict co-
operative princip-es. Ho.ever* t/e mi?e+ t1pe /as an a+vantage over t/e
pure t1pe in so ,ar as t/e1 can +ra. t/eir ,un+s ,rom t/e non-agricu-tura-
sector too.
T/e Centra- Co-operative Banks +ra. t/eir ,un+s ,rom s/are
capita-* +eposits* -oans ,rom t/e :tate C-operative Banks an+ ./ere :tate
Banks +o not e?ist ,rom t/e RBI* N$B$R an+ commercia- )anks.
N$B$R is t/e supervisor1 aut/orit1 ,or Centra- Co-operative Banks.
eposits constitute t/e ma0or component o, sources o, ,un+s* ,o--o.e+ )1
)orro.ings. T/e main ,unction o, Centra- Co-operative Banks is to ,inance
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23
t/e primar1 cre+it societies. In a++ition t/e1 carr1 on Commercia- )anking
activities -ike acceptance o, +eposits* granting o, -oans an+ a+vances on t/e
securit1 o, ,irst c-ass gui-t-e+ge+ securities* ,i?e+ +eposit receipts* go-+*
)u--ion* goo+s an+ +ocuments o, tit-e to goo+s* co--ection o, )i--s* c/e>ues*
etc.* sa,e custo+1 o, va-ua)-es an+ agenc1 services. T/e1 are e?pecte+ to
attract +eposits ,rom t/e genera- pu)-ic. T/e1 a-so act as L)a-ancing centresM*
making avai-a)-e access ,un+s o, one primar1 to anot/er ./ic/ is in nee+ o,
t/em.
T/e centra- co-operative )anks are -ocate+ at t/e +istrict /ea+>uarters
or some prominent to.n o, t/e +istrict. T/ese )anks /ave a ,e. private
in+ivi+ua-s a-so ./o provi+e )ot/ ,inance an+ management. T/e centra- co-
operative )anks /ave t/ree sources o, ,un+s*
T/eir o.n s/are capita- an+ reserves
eposits ,rom t/e pu)-ic an+
@oans ,rom t/e state co-operative )anks
iii. "rimar1 $gricu-ture Cre+it :ocietiesF
"rimar1 $gricu-tura- Cre+it :ocieties is t/e ,oun+ation
o, t/e co-operative cre+it s1stem on ./ic/ t/e superstructure o, t/e s/ort-
term co-operative cre+it s1stem rests. It +ea-s +irect-1 .it/ in+ivi+ua-
,armers* provi+e s/ort an+ me+ium term cre+it* supp-1 agricu-tura- inputs*
+istri)ute consume artic-es an+ a-so arrange ,or t/e marketing o, pro+ucts o,
its mem)ers t/roug/ a c-operative marketing societies. T/ese societies ,orm
t/e )asic unit o, co-operative cre+it s1stem in In+ia. T/ese vo-untar1
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24
societies )ase+ on princip-e o, one man one vote /as pose+ c/a--enge to
e?p-oitative practices o, t/e vi--age mone1-en+ers. T/e ,armers an+ ot/er
sma---time )orro.ers come in +irect contact .it/ t/ese societies. T/e
success o, t/e co-operative cre+it movement +epen+ -arge-1 on t/e strengt/
o, t/ese vi--age -eve- societies.
T/e ma0or o)0ective o, "rimar1 agricu-tura- Cre+it :ocieties is
to serve t/e nee+ o, .eaker sections o, t/ese societ1. ;or t/is purpose* t/e
peop-e .it/ -imite+ means* particu-ar-1 .it/ sc/e+u-es castes an+ sc/e+u-e+
tri)es* are encourage+ to )ecome mem)ers o, t/ese societies. :o* t/e1 must
,unction e,,ective-1 as .e---manage+ an+ mu-ti-purpose institutions
mo)i-i9ing t/e savings o, t/e rura- peop-e an+ provi+ing t/e package o,
services inc-u+ing cre+it* supp-1 o, agricu-tura- inputs an+ imp-ements*
consumer goo+s* marketing services an+ tec/nica- gui+ance .it/ ,ocus on
.eaker sections. 'overnment /as promote+ mu-ti-purpose societies in tri)a-
areas ,or t/e )ene,it o, peop-e -iving t/ere.
C"a$%/$s 'a&$1 b5 t"!s s)&!$t!$s8 a*a+t '+)# !#*+),!%/ +$s)(+&$s
#)b!!0at!)%8 a+$ t"$ ')).!%/:
Improving vo-ume o, )usiness
Re+ucing cost o, management.
Correcting im)a-ances in -oan outstan+ing.
Improving ski-- o, t/e sta,, an+ imparting pro,,esiona-isation
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25
:treng/tening Ganagement In,ormation :1stem (GI:).
II. 2)%/-t$+# R(+a C)-)*$+at!,$s:
T/e -ong-term rura- co-operative provi+e t1pica--1 me+ium an+
-ong-term -oans ,or making investments in agricu-ture* rura- in+ustries an+*
in t/e recent perio+* /ousing. 'enera--1* t/ese co-operatives /ave t.o tiers*
i.e. :tate Co-operative $gricu-ture an+ eve-opment Banks (:C$RBs) at
t/e state -eve- an+ "rimar1 Co-operative $gricu-ture an+ Rura- eve-opment
Banks ("C$RBs) at t/e ta-uka or te/si- -eve-. Ho.ever* some :tates /ave
a unitar1 structure .it/ t/e state -eve- )anks operating t/roug/ t/eir o.n
)ranc/es.
i. :tate Co-operative $gricu-ture an+ eve-opment Banks
(:C$RBs)F
:tate Co-operative $gricu-ture an+ eve-opment Banks
constitute t/e upper-tier o, -ong term co-operative cre+it structure. T/oug/
-ong term cre+it co-operatives /ave )een a--o.e+ to access pu)-ic +eposits
un+er certain con+itions* suc/ +eposits constitute a re-ative-1 sma--
proportion o, t/eir tota- -ia)i-ities. T/e1 are most-1 +epen+ent on )orro.ings
,or on--en+ing.
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26
T/e main o)0ective o, t/e Co-operative :tate $gricu-ture an+ Rura-
eve-opment )ank is to ,inance primar1 agricu-ture an+ rura- +eve-opment
)anks. T/e )ank un+ertakes t/e ,o--o.ing ,unctions to ac/ieve t/e a)ove
o)0ectivesF-
(a) ;-oatation o, e)entures*

()) Receiving eposits7
(c) 'rant o, -oans to primar1 cooperative agricu-ture an+ rura-
+eve-opment )anks ,or purposes approve+ )1 t/e Nationa- Bank ,or
$gricu-tura- an+ Rura- eve-opment an+ Registrar o, Cooperative :ocieties7
(+) To ,unction as t/e agent o, an1 cooperative )ank su)0ect to suc/
con+itions as t/e Registrar ma1 speci,17
(e) To +eve-op* assist an+ coor+inate t/e .ork o, a,,i-iate+ primar1
cooperative agricu-ture an+ rura- +eve-opment )anks.

T/e )ank issues -ong term an+ me+ium term -oans to.ar+s
agricu-tura- an+ a--ie+ activities -ike construction o, go+o.ns* catt-e s/e+*
,arm /ouse* purc/ase o, -an+s etc.* an+ ,or minor irrigation purposes -ike
construction o, ne. .e--s* +eepening o, e?isting .e--s etc.* In a++ition* -ong
term -oans are a-so sanctione+ ,or anima- /us)an+r1* ,is/eries* p-antation*
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27
,arm mec/ani9ation* non-,arm sector an+ ot/er non-minor irrigation
sc/emes.
ii. "rimar1 Co-operative $gricu-ture an+ Rura- eve-opment Banks
("C$RBs)F
"rimar1 Co-operative $gricu-ture an+ Rura-
eve-opment Banks are t/e -o.est -a1er o, -ong term cre+it co-operatives. It
is primari-1 +epen+ent on t/e )orro.ings ,or t/eir -en+ing )usiness.
T/e1 provi+e cre+it ,or +eve-opmenta- purposes -ike minor irrigation*
cu-tivation o, p-antation crops an+ ,or +iversi,ie+ purposes -ike pou-tr1*
+air1ing an+ sericu-ture on sc/ematic )asis. T/e1 get re>uisite ,inancia-
assistance ,rom t/e Cooperative :tate $gricu-ture an+ Rura- eve-opment
Bank.
In or+er to .i+en t/eir scope o, -en+ing to compete .it/ ot/er
,inancia- agencies* t/e primar1 cooperative agricu-ture an+ rura-
+eve-opment )anks /ave )een permitte+ to ,inance artisans* cra,tmen an+
sma-- sca-e entrepreneurs. T/e1 /ave a-so )een permitte+ to issue -oans to
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28
sma-- roa+ transport operators in rura- areas ,or purc/ase o, goo+s carriers
an+ passenger ve/ic-es.
$s a resu-t* +uring 3445-4C* t/e "rimar1 Cooperative
$gricu-ture an+ Rura- eve-opment Banks /ave again starte+ -en+ing ,or t/e
Non-;arm :ector inc-u+ing De.e- @oans.
CH. 5. R#'!@$TORY BOI#: O; CO-O"#R$TI%# B$N&:
CO-OPERATIVE BANKS AND NABARD
$s an ape? )ank invo-ve+ in re,inancing cre+it nee+s o, ma0or
,inancia- institutions in t/e countr1 engage+ in o,,ering ,inancia- assistance
to agricu-ture an+ rura- +eve-opment operations an+ programmes* N$B$R
/as )een s/aring .it/ t/e Reserve Bank o, In+ia certain supervisor1
,unctions in respect o, co-operative )anks an+ Regiona- Rura- Banks
(RRBs).
As *a+t )' t"$s$ '(%&t!)%s8 !t
!n+ertakes inspection o, Regiona- Rura- Banks (RRBs) an+ co-
operative )anks (ot/er t/an ur)anJprimar1 co-operative )anks) un+er
t/e provisions o, Banking Regu-ation $ct* 1<=<.
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29
!n+ertakes inspection o, :tate Co-operative $gricu-ture an+ Rura-
eve-opment Banks (:C$RBs) an+ ape? non-cre+it co-operative
societies on a vo-untar1 )asis
!n+ertakes port,o-io inspections* s1stems stu+1* )esi+es o,,-site
survei--ance o, co-operative )anks.
"rovi+es recommen+ations to Reserve Bank o, In+ia on opening o,
ne. )ranc/es )1 :tate Co-operative Banks.
$+ministering t/e Cre+it Gonitoring $rrangements in Co-operative
)anks.
C)+$ F(%&t!)%s )' NABARD ')+ C)-)*$+at!,$ Ba%-s:
N$B$R /as )een entruste+ .it/ t/e statutor1 responsi)i-it1 o,
con+ucting inspections o, :tate Co-operative Banks (:CBs)* istrict Centra-
Co-operative Banks (CCBs) an+ Regiona- Rura- Banks (RRBs) un+er t/e
provision o, t/e Banking Regu-ation $ct* 1<=<. In a++ition* N$B$R /as
a-so )een con+ucting perio+ic inspections o, state -eve- co-operative
institutions suc/ as :tate Co-operative $gricu-ture an+ Rura- eve-opment
Banks (:C$RBs)* on a vo-untar1 )asis.
REFOR3S IN BANKING REGU2ATION ACT8 1949
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30
$men+ments to t/e BR $ct .ou-+ cover t/e ,o--o.ingF
i. $-- cooperative )anks .ou-+ )e on par .it/ t/e commercia- )anks as ,ar as
regu-ator1 norms are concerne+.
ii. RBI .i-- prescri)e ,it an+ proper criteria ,or e-ection to Boar+s o,
cooperative )anks. :uc/ criteria .ou-+ /o.ever not )e at variance .it/ t/e
nature o, mem)ers/ip o, primar1 cooperatives ./ic/ constitute t/e
mem)ers/ip o, t/e istrictJ Centra- Co-operative Banks an+ :tate Co-
operative Banks.
iii. Ho.ever* as ,inancia- institutions* t/ese Boar+s .ou-+ nee+ minimum
support at t/e Boar+ -eve-. T/us* t/e RBI .i-- prescri)e certain criteria ,or
pro,essiona-s to )e on t/e Boar+s o, cooperative )anks. In case mem)ers
.it/ suc/ pro,essiona- >ua-i,ications or e?perience +o not get e-ecte+ in t/e
norma- e-ectora- process* t/en t/e Boar+ .i-- )e re>uire+ to appoint suc/
pro,essiona-s in t/e Boar+ an+ t/e1 .ou-+ /ave ,u-- voting rig/ts.
iv. T/e C#Os o, t/e cooperative )anks .ou-+ )e appointe+ )1 t/e respective
)anks t/emse-ves an+ not )1 t/e state. Ho.ever* as t/ese are )anking
institutions* RBI .i-- prescri)e t/e minimum >ua-i,ications o, t/e C#O to )e
appointe+ an+ t/e names propose+ )1 t/e cooperative )anks ,or t/e position
o, C#O .ou-+ /ave to )e approve+ )1 RBI.
v. Cooperatives ot/er t/an cooperative )anks as approve+ )1 t/e RBI .ou-+
not accept non-voting mem)er +eposits. :uc/ cooperatives .ou-+ a-so not
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31
use .or+s -ike ()ank2* ()anking2* ()anker2 or an1 ot/er +erivative o, t/e
.or+ ()ank2 in t/eir registere+ name.
I, a :tate 'overnment an+ t/e CC: units in t/at state are ent/usiastic
in imp-ementing t/e package* ,u-,i--ment o, a-- t/e a)ove con+itiona-ities
an+ conse>uent-1 re-ease o, t/e entire ,inancia- assistance cou-+ )e
comp-ete+ even .it/in a 1ear.
REFOR3S IN CO-OPERATIVE SOCIETIES ACT:
$s making -ega- amen+ments is time consuming process* t/e state
governments ma1 issue #?ecutive Or+ers un+er t/e e?isting po.ers to )ring
in t/e +esire+ re,orms ./ic/ .i-- re-ate toF
i. #nsuring ,u-- voting mem)ers/ip rig/ts on a-- users o, ,inancia- services
inc-u+ing +epositors in cooperatives ot/er t/an cooperative )anks.
ii. Removing state intervention in a-- ,inancia- an+ interna- a+ministrative
matters in cooperatives.
iii. "rovi+ing a cap o, 3BN on government e>uit1 in cooperatives an+
-imiting participation in t/e Boar+s o, cooperative )anks to on-1 one
nominee. $n1 state government or a cooperative .is/ing to re+uce t/e state
e>uit1 ,urt/er .ou-+ )e ,ree to +o so an+ t/e cooperative .i-- not )e
prevente+ ,rom +oing so.
Page
32
iv. $--o.ing transition o, cooperatives registere+ un+er t/e C:$ to migrate
un+er t/e "ara--e- $ct (./erever enacte+)
v. Iit/+ra.ing restrictive or+ers on ,inancia- matters
vi. "ermitting cooperatives in a-- t/e t/ree tiers ,ree+om to take -oans ,rom
an1 ,inancia- institution an+ not necessari-1 ,rom on-1 t/e upper tier an+
simi-ar-1 p-acing t/eir +eposits .it/ an1 regu-ate+ ,inancia- institution o,
t/eir c/oice.
vii. "ermitting cooperatives un+er t/e para--e- $cts (./erever enacte+) to )e
mem)ers o, upper tiers un+er t/e e?isting cooperative societies $cts an+
vice-versa.
viii. @imiting po.ers o, state governments to superse+e Boar+s
i?. #nsuring time-1 e-ections )e,ore t/e e?pir1 o, t/e term o, t/e e?isting
Boar+s.
?. ;aci-itating regu-ator1 po.ers ,or RBI in case o, cooperative )anks as
mentione+ ear-ier.
ASSET STRUCTURE OF CO-OPERATIVE BANKS AS PER 2::;
Page
33
T/e cooperative )anksJcre+it institutions constitutes t/e secon+
segment o, In+ian )anking s1stem* comprising o, a)out 1=N o, t/e
tota- )anking sector asset (Garc/ 3445).
Bu-k o, t/e cooperative )anks operate in t/e rura- regions .it/ rura-
coop )anks accounting ,or A5N o, t/e tota- asset an+ A5N o, t/e tota-
)ranc/es o, a-- cooperative )anks.
:/are o, rura- cooperatives in tota- institutiona- cre+it .as A3N in
1<<3-<E* E=N in 3443-4E an+ BEN in 344A-45.
Cooperative )anks /ave an impressive net.ork o, out-ets ,or
institutiona- cre+it in In+ia* particu-ar-1 in rura- In+ia (1 "$C: per 5
vi--ages).
In Garc/ 3445* t/ere .ere <5*33= "$C: in rura- In+ia against E4*E<E
)ranc/es o, commercia- )anks (more t/an E times o, out-et o, coop
)anks).
In Garc/ 3445* t/ere .ere 143 savings $JC an+ 11E cooperative )ank
mem)ers per 1444 rura- in In+ia.
Cooperative )anks ()ot/ rura- an+ ur)an) cater to sma-- an+ margina-
c-ients.
Page
34
;inancia- /ea-t/ o, t/e cooperative cre+it institutions* particu-ar-1 t/e
rura- cooperatives* /as )een ,oun+ to )e poor )1 severa- Committees.
St+(&t(+$ )' C)-)*$+at!,$ Ba%-!%/ <3a+&" 2::;=
Institution Num)er o,
Institute
Num)er o,
Branc/
$sset :/are
(N)
A. R(+a C)-)*$+at!,$ C+$1!t
St+(&t(+$:
1. S")+t t$+#:
:tate Coop )ank
Centra- Coop )ank
"rimar1 $gri Coop soc.
2. 2)%/ t$+#:
:tate Coop $gri an+ Rura-
ev )anks
"rimar1 Coop $gri an+
Rura- ev )anks
1:;49;

1:>;?1
E1
EA<
<533=

;1>
34
A<A
112?9@
111:9:
<EC
13<3C
<533=

1?::
114=
A<A
>;
@?
1B
3<
1=
?.3
=.=
E.<
Page
35
B. U+ba% C)-)*$+at!,$ Ba%-s: 49?:@ @>>:: 33
CH. C. :TR#N'TH $N I#$&N#:: O; CO-
O"#R$TI%# B$N&
3AIN AEAKNESS OF CO-OPERATIVE BANKS
T/e main .eaknesses o, co-operative )anks are as ,o--o.sF
1. T/e vita- -ink in t/e co-operative cre+it s1stem name-1* t/e "rimar1
$gricu-tura- Co-operative :ocieties* t/emse-ves remain ver1 .eak. T/e1 are
too sma-- in si9e to )e economica- an+ via)-e7 )esi+es too man1 o, t/em are
+ormant* e?isting on-1 on paper.
3. Iit/ t/e e?pan+ing cre+it nee+s o, t/e rura- sector* t/e commercia- )anks
/ave come in active-1 to meet t/e cre+it re>uirements o, t/is sector* an+ t/is
/as aggravate+ t/e +i,,icu-ties o, co-operative )anks. T/e t/eor1 t/at co-
Page
36
operative )anks .ou-+ )e )uo1e+ up )1 t/e competition ,rom ot/er ,inancia-
institutions +oes not appear to /ave .orke+.
E. Co-operative )anks are not +oing .e-- in a-- t/e states7 on-1 a ,e. account
,or a ma0or part o, t/eir )usiness. ;or e?amp-e* 5B per cent o, tota- +eposits
mo)i-ise+ )1 :tate C-operative Banks .as ,rom on-1 seven states in 1<C5-
$n+/ra "ra+es/* 'u0arat* &arnataka* Ga+/1a "ra+es/* Ga/aras/tra* Tami-
Na+u* an+ !ttar "ra+es/.
=. T/ese )anks sti-- re-1 ver1 /eavi-1 on re,inancing ,aci-ities ,rom t/e
government* t/e RBI* an+ N$B$R. T/e1 /ave 1et not )een a)-e to
)ecome se-,-re-iant in respect o, resources t/roug/ +eposit mo)i-isation.
B. T/e1 su,,er ,rom +angerous-1 -o. or .eak >ua-it1 o, -oan assets* an+
,rom /ig/-1 unsatis,actor1 recover1 o, -oans. T/e1 su,,er ,rom
in,rastructura- .eaknesses an+ structura- ,-a.s. T/e1 +o not -ook -ike )anks
an+ +o not inspire con,i+ence in t/e potentia- mem)ers* +epositors an+
)orro.ers.
A. "oor resource )ase is main constraint o, t/ese )anks. Re-ative-1 -o. per
capita )ase an+ -ess e>uit1 )ase +ue to non-participations o, t/e mem)ers in
t/e ,inancia- activities an+ -imite+ area o, operation is )ecoming a
permanent o)stac-e in t/e progress o, t/is sector.
5. "oor pro,it position an+ )ur+en o, /uge accumu-ate+ -osses o, severa- co-
operative )anks /as t/reatene+ t/e ver1 surviva- o, t/ese )anks. T/e amount
o, cost o, management o, t/is sector /as a+verse-1 a,,ecte+ its pro,ita)i-it1.
Page
37

C. Gost o, t/e Co-operative )anks are su,,ering ,rom t/e -ack o, pro,essiona-
management. In t/e +eregu-ate+ environment an+ sti,, competition in t/e
)anking sector* +o to -ack o, t/e pro,essiona-ism in carr1ing out )anking
activities* t/e .eakness o, t/ese )anks /as )ecome more prominent.
<. Gan1 co-operative )anks even no. continue to ,o--o. age-o-+ s1stem an+
proce+ures* ./ic/ are not con+uctive in t/e present tec/no-ogica--1 +riven
)anking environment. #?cept some Co-operative )anks* tec/no-ogica-
+eve-opment in In,ormation Tec/no-og1 or computeri9e+ +ata management
is conspicuous-1 $)sent.
14. T/ere is a -ack o, proper governance. Corporate 'overnance /as great
re-evance in t/e present environment. $s t/ere is no ,orma- s1stem o,
corporate governance in co-operative )anks* man1 )anks /ave )ecome t/e
/ot )e+ o, po-itica- patronage* unscrupu-ous ,inancia- practice an+ gross
mis-management.
11. $not/er pro)-em arises out o, t/e +ua-it1 o, contro- over t/em i.e. t/ese
)anks are organi9e+ un+er +ua- contro- o, RBI an+ as .e-- as respective state
government. $part ,rom t/e intervention o, t/e ape? )o+ies* t/e 'overnment
is a-so ,oun+ to e?ercise contro- in various .a1s on t/ese )anks.
'overnment intervention in t/e management* a+ministration an+ )usiness
operation o, co-operative )anks /as ma+e t/e institution -ose /is o.n
+istinct c/aracter.
Page
38
13. T/e1 su,,er ,rom too muc/ o,,icia-isation an+ po-iticisation. !n+ue
governmenta- interventions /ave prevente+ t/em ,rom +eve-oping stea+i-1
as a se-,-re-iant an+ resi-ient cre+it s1stem. Gost o, t/em are /ea+e+ )1
po-iticians.
1E. T/e1 un+u-1 +epen+ on government capita- rat/er t/an mem)er capita-.
T/ere is no active participation o, t/eir mem)ers in t/eir .orking* ./ic/ can
come a)out i, t/e1 .ork .it/ mem)ersH mone1 rat/er t/an government
-argesse.
GOVERN3ENT INITIATIVES TO STRENGT4EN T4E
DEVE2OP3ENT OF CO-OPERATIVE BANKS
#ven )e,ore t/e su)mission o, t/e &/usro Committee Report* t/e
government an+ t/e RBI /a+ initiate+ certain measures to strengt/en t/e
+eve-opment o, co-operative )anks. :ome o, t/ese po-ic1 initiatives .ere as
,o--o.sF
(i) T/e N$B$R /a+ ,ormu-ate+ a sc/eme ,or t/e reorganisation o,
"rimar1 $gricu-tura- Co-operative :ocieties an+ t/e imp-ementation o, t/is
sc/eme /a+ starte+ in t/ose states ./ic/ /ave accepte+ it.
(ii) T/e programme ,or +eve-opment o, se-ecte+ "rimar1 $gricu-tura- Co-
operative :ocieties into tru-1 mu-ti-purpose co-operative societies /as )een
Page
39
imp-emente+ in man1 states an+ !nionterritories.
(iii) In a++ition to suc/ programmes* certain state governments -ike $n+/ra
"ra+es/* Ga+/1a "ra+es/ Iest Benga- /a+ a-so initiate+ +eve-opment
programmes to strengt/en t/e .orking o, t/e co-operative cre+it institutions
at t/e )ase -eve-.
(iv) On t/e )asis o, t/eir ,inancia- position as on E4 Dune 1<C5* 15B Centra-
Co-operative Banks an+ 5 :tate Co-operative Banks in t/e countr1 .ere
i+enti,ie+ as H.eakH )anks an+ )roug/t un+er t/e programme o, re/a)i-itation
./ic/* /o.ever* +i+ not rea--1 .ork >uite .e--.
(v) Iit/ a vie. to ena)-ing .eak )anks ./ic/ .ere eit/er ine-igi)-e or .ere
on t/e verge o, )ecoming ine-igi)-e ,or re,inance :!""411* a 13-"oint
$ction "rogramme /a+ )een ,ormu-ate+ an+ circu-ate+ )1 N$B$R to a--
t/e state governments.
INITIATIVES TOAARDS DEVE2OP3ENT OF CO-OPERATIVE
BANKS:
1. Reorganisation o, "rimar1 $gricu-tura- cre+it :ocieties.
(a sc/eme )1 N$B$R)
3. Nationa- Co-operative Bank o, In+ia (NCBI) .as registere+ in
1<<E.(Gu-ti-state co-operative societ1)-it /as no regu-ator1 ,unctions.
Page
40
E. Co-operative +eve-opment )ank (set up )1 N$B$R).
=. $--o.ing a-- "CBMs to un+ertake e>uipment -easing an+ /ire- purc/ase
,inancing.
B. @icensing o, ne. )anks.
SUGGESTIONS FOR EFFECTIVE OPERATION IN CO-
OPERATIVE BANKING:
T/e ,o--o.ing suggestions can )e ma+e ,or improving t/e e,,ectiveness in
operation o, Co-operative )ankingF
1. It is apparent t/at t/e mountain over+ue /as )ecome a ma0or pro)-em o,
most o, t/e co-operative )anks an+ t/eir per,ormance in managing Non
"er,orming $ssets is not satis,actor1. ;irm measure s/ou-+ )e ,o--o.e+ to
make cre+it appraisa-* +ocumentation* +is)ursement* monitoring* etc. T/e
,o--o.ing strategies ma1 /e-p t/e )anks in avoi+ing or re+ucing N"$Ms.
"re-sanction strategiesF Be,ore sanctioning a -oan* a )ank /as to go ,or
+etai-e+ in>uir1 a)out )orro.er an+ /is -oan proposa-.
"ost-sanction strategiesF $,ter t/e -oan is +is)urse+* proper supervision o,
-oan uti-i9ation is to )e ensure+. Bank /as to maintain proper re-ations/ip
.it/ t/e )orro.er an+ ensure t/at ,irst insta--ment i+ +eposite+ time-1.
Page
41
"ersuasion or ;o--o.-upF $s a step* )ank /as to pursue .it/ )orro.er
an+ i, re>uire+* resc/e+u-ing o, insta--ments )e ma+e.
T/e )ank s/ou-+ a+opt /e s1stem o, computeri9e+ monitoring o, -oans.
3. T/ese )anks can a-so go ,or suc/ sc/emes ,or opening o, saving )ank an+
ot/er accounts treate+ as -o. cost +eposit )ase as .e-- as c-iente-e )ase o,
t/e )anks .i-- take remarka)-e s/ape. In t/is respect* )anks can intro+uce
e,,ective-1 various innovative +eposit sc/emes -ike .omenMs savings*
c/i-+renMs savings* savings sc/eme ,or 1out/* +ai-1 co--ection etc.
E. Iit/ -imite+ area o, operation ,or so man1 +eca+es toget/er* !r)an Co-
operative )anks co-+ not e?pan+ t/eir )usiness in ot/er area in genera-. $t
t/is 0uncture* it s/ou-+ /ave governmenta- support an+ t/e government
s/ou-+ -i)era-i9e t/is area o, operation* so t/at t/e1 cou-+ incrase t/eir
)usiness at t/eir .i--.
=. $-- Co-operative )anks s/ou-+ come in one um)re--a i.e. COR#
B$N&IN'.
B. Co-operative )anks* .it/ t/eir ne.-1 ,orme+ emp/asis on pru+entia-
norms* nee+ a /ig/ +egree o, pro,essiona-ism in management.
A. :ome Co-operative )anks particu-ar-1 ./ic/ are sma-- )anks not /aving
su,,icient )ranc/ net.ork are suggeste+ to enter into tie-up arrangements
.it/ commercia- )anks -ike ICICI Bank* H;C Bank* etc an+ in t/is .a1
t/ese )anks cou-+ e?pan+ t/eir )usiness.
Page
42

C)-)*$+at!,$ ba%-s ,Bs Ot"$+ ba%-s
I, .e -ook at t/e return provi+e+ )1 various co-operative )anks* .e
imme+iate-1 ,in+ t/at t/e1 are /ig/er t/an returns provi+e+ )1 t/e various
nationa-i9e+ an+ private )anks. ;or amount -ess t/an 1B -ak/s* T/e returns
provi+e+ )1 various co-operatives )anks* :BI an+ ICICI are as ,o--o.sF
Banks
NameJ "erio+
<1 +a1s-
1C4
+a1s
1C1
+a1s to
1 Year
1 1ear to
B=4 +a1s
B=1 +a1s to
3 1ears
3 1ears to
E 1ears
E 1ears to
B 1ears
$)/1u+a1a Co-
operative Bank
A.B4N 5.44N 5.3BN 5.B4N 5.5BN C.44N
TH# BH$R$T
Co-operative
Bank
(G!GB$I)
@T
B.B4N A.5BN 5.3BN 5.3BN 5.44N 5.44N
:aras.at Co-
operative Bank
B.3BN A.44N A.B4N 5.3BN 5.3BN 5.3BN
$/me+a)a+
Gercanti-e
Coop Bank
B.B4N A.44N 5.44 N 5.44N 5.44N 5.44N
:tate Bank o,
In+ia (:BI)
=.5BN B.3BN A.44N A.44N A.B4N A.B4N
ICICI Bank B.3BN A.44N A.3BN A.3BN 5.44N 5.B4N
Page
43
:o* t/e ,irst >uestion ./ic/ comes to our min+ is ./1 s/ou-+ not put
our mone1 in Co-operative )anks rat/er t/an nationa-i9e+ or private )anks.
But t/en t/ere is a risk ,actor ./ic/ comes in. In In+ia 1< Co-operative
)anks /ave c-ose+ +o.n in 344<O :o* is it sa,e to park 1our va-ua)-e mone1
in Co-operative )anksP
I/i-e Co-operative )anks .ere c-osing +o.n* t/e Reserve Bank o,
In+ia (RBI) trie+ to )ring t/em un+er tig/ter contro-. Ti-- a ,e. 1ears ago*
!r)an Commercia- Banks .ere not strict-1 monitore+ .it/ t.o regu-ators in
t/e RBI an+ t/e Registrar o, Co-operative :ocieties. But no. t/e RBI /as
taken various measures to )ring t/em un+er contro-.
It /as signe+ Go!s .it/ 11 states to set up task ,orces on !r)an Co-
operative Banks to .ork .it/ t/e registrars on reme+ia- action an+ take t/e
toug/ +ecisions on t/e structure. It /as a-so put a -imit o, (1B per cent o, t/e
o.n ,un+s o, t/e )ank2 ,or -oans to one )orro.er group* making it +i,,icu-t
,or t/e )anks to give a /uge -oan to one entit1 an+ compromise its sta)i-it1*
as .as /appening ear-ier. $ccor+ing to t/e RBI* Co-operative )anks are
inten+e+ primari-1 ,or mem)ers an+ a-- ,inancia- in,ormation pertaining to
t/e )ank is re>uire+ to )e ma+e avai-a)-e to t/em.
In a++ition* accor+ing to t/e e?isting regu-ations* a )ank is re>uire+ to
pu)-is/ its )a-ance s/eet in a ne.spaper in circu-ation in t/e main area o,
operations o, t/e )ank. T/e1 are a-so re>uire+ to p-ace t/eir annua- accounts
)e,ore t/e annua- genera- meeting. Certain minimum +isc-osures /ave )een
prescri)e+ )1 RBI. $-- t/is in,ormation can )e use+ )1 pu)-ic in making
investment +ecision.
Page
44
Ho.ever* t/e )ank customer /as to make /is or /er o.n c/oice*
+epen+ing on ./ic/ t/e )ank o,,ers t/e most suita)-e pro+uct. I/i-e t/e
RBI is +oing its )it* it sa1s 1ou s/ou-+ a-so run t/e ,o--o.ing c/ecks to
ensure t/at 1ou /ave a nice e?perience.
C"$&- ')+ 1$*)s!t &),$+. $sk t/e )ank to ./at e?tent 1our +eposit
.i-- )e covere+ )1 IC'C insurance i, 1ou are not investing in t/e
name o, an in+ivi+ua- )ut as a )usiness organi9ation.( In t/e event o, a
)ank ,ai-ure* IC'C protects )ank +eposits t/at are pa1a)-e in In+ia.)
S&"$1($1 ba%-s. T/e BE sc/e+u-e+ cooperatives )anks are ,air-1
sa,e.
S!0$. ;or non-sc/e+u-e+ )anks* t/ere is sa,et1 in si9e. eci+e in ,avor
o, )igger ur)an co-operative )anks.
N)%-*$+')+#!%/ ass$ts. T/ese s/ou-+ )e .it/in sing-e +igits. T/e
/ig/er t/e N"$* t/e )igger t/e risk.
Ca*!ta a1$C(a&5. T/is ratio s/ou-+ not )e -ess t/an < per cent.
C+$1!t-1$*)s!t +at!). I+ea--1* t/e ratio s/ou-+ )e AA per cent.
$n1t/ing more s/o.s t/at t/e )ank is not in a position to -en+ an+*
/ence* get ne. )usiness to pa1 )ack t/e +epositors.
Page
45
P+)'!ts. C/eck ./et/er t/e )ank /as )een making pro,its ,or t/e -ast
t/ree 1ears.
RBI 1!+$&t!,$: C/eck out t/e current ,inancia- status o, a )ank
operating un+er RBIMs +irective )e,ore +ea-ing .it/ it.
S)#$ 'a&ts ab)(t C))*$+at!,$ ba%-s !% I%1!a:
:ome cooperative )anks in In+ia are more ,or.ar+ t/an man1 o, t/e state
an+ private sector )anks.
T/e tota- +eposits & -en+ing o, Cooperative Banks in In+ia is muc/ more
t/an O-+ "rivate :ector Banks & a-so t/e Ne. "rivate :ector Banks.
T/is e?ponentia- gro.t/ o, Co operative Banks in In+ia is attri)ute+
main-1 to t/eir muc/ )etter -oca- reac/* persona- interaction .it/
customers* an+ t/eir a)i-it1 to catc/ t/e nerve o, t/e -oca- c-iente-e.
Page
46
CH. <. C$:# :T!Y
CASE STUDY
V!-as S)("a+1a C)-)*$+at!,$ Ba%- 2t18 Ka+%ata-a8 I%1!a
Ab)(t V!-as S)("a+1a C)-)*$+at!,$ Ba%- 2t1.
%ikas :ou/ar+a Co-operative Bank @t+. /as its main o,,ice -ocate+ in
Hospet* &arnataka an+ /as )ranc/es at Hospet :tation Roa+* Hospet Garket
an+ Hu)-i. #sta)-is/e+ on 31 $ugust 1<<5* t/e )ank /as an estimate+
+eposit o, B4 crores an+ /as recor+e+ pro,its to a tune o, 1.= crores ,or t/e
1ear en+ing Garc/ 3445. T/e )ank o,,ers ,inancia- services to miners*
carrier o.ners* tra+ers* an+ sma-- an+ me+ium entrepreneurs.
Page
47
2at$st T$&"%))/!$s
It is t/e ,irst )ank in t/e In+ian co-operative )anking sector to intro+uce
igita- ispenser Tec/no-og1 an+ a-so t/e ,irst )ank in t/e state o,
&arnataka to provi+e Te-e)anking ,aci-it1 to its customers. To protect its
customersM interests t/e )ank /as provi+e+ ;ake Currenc1 etectors an+ sa,e
+eposit -ockers ,aci-it1.
Being a tec/no-savv1 )ank* it is t/e ,irst )ank in &arnataka state to a+opt
#-ectronic ;un+ Trans,er (#;T) :c/eme. It /as )een t/e ,irst institution to
respon+ to innovative concepts an+ /as )een a ro-e mo+e- to man1 ot/er co-
operative )anks in t/e state. T/e )ank .as >uick in a+apting to t/e c/anging
)anking scenario )1 maintaining not on-1 t/e -atest in,rastructure )ut a-so )1
+esigning t/e interiors o, t/e )ank to get a -ook an+ ,ee- t/at is at par .it/
t/e mu-tinationa- )anks.
G)a )' t"$ Ba%-
Being a tren+setting )ank in t/e co-operative sector t/at serves its customers
EAB +a1s a 1ear an+ 13 /ours a +a1* t/e goa- o, t/e )ank .as to improve t/e
>ua-it1 o, customer service* t/e turn-aroun+ time* an+ accurac1 o, )ack-
o,,ice operations t/ere)1 re+ucing costs an+ improving pro,its.
T/e )ankMs goa- is to provi+e customer satis,action .it/ accurac1 an+
re-ia)i-it1 o, service. T/e )ank ensures sa,et1 an+ pro,ita)i-it1 o, assets
.it/ +ue +i-igence )1 a+opting appropriate in,ormation tec/no-og1 an+
maintenance o, su,,icient )ackup o, t/e s1stem an+ t/e +ata. T/e )ank a-so
aims to increase its customer )ase )1 intro+ucing a variet1 o, innovative
,inancia- services an+ pro+ucts.
Page
48
T"$ Ba%-Ds 3!ss!)%
Improve >ua-it1 o, customer service -eve-s
Re+uce cost o, customer service
T/e )ank a-so aims atF
"rovi+ing a range o, ,inancia- services to t/e customer
Gaintaining transparenc1 in customer re-ations
;u-,i--ing a-- commitments
"racticing 0u+icious management o, risks
O,,ering services to customersH satis,action
Training emp-o1ees to ren+er pro,essiona- an+ p-easing service to its
customers
'iving ,air return to its sta,, an+ contri)uting to t/eir genera- .e-,are
VS)'tDs S(V!-as "$*$1 t"$ ba%- a&"!$,$ !ts /)a
:u%ikas* a user-,rien+-1* cost e,,ective* ,-e?i)-e an+ se-,-supporting
app-ication permits eas1 per,ormance* improves overa-- management
e,,icienc1* an+ ena)-es t/e )ank to concentrate on t/e )usiness o, ,inance
.it/out muc/ concern a)out t/e ever c/anging IT tren+s.
Page
49
T"+)(/" t"!s8 ba%- a%1 &(st)#$+ /)t #a%5 b$%$'!ts !-$:
E(!&- &(st)#$+ s$+,!&$
T/e )ank .as a)-e to su)stantia--1 +ecrease t/e time a customer spen+s at
t/e counter as t/e so,t.are provi+es a sing-e vie. o, a-- accounts o, t/e
customer. I/ic/ ma+e t/e )ank )etter as per t/eir customers.
R$1(&$1 +$1(%1a%t tas-s
Re+ucing re+un+ant tasks meant more resources avai-a)-e ,or recover1. :o*
customer .ere getting auick ,aci-ities.
N$. 1$!,$+5 &"a%%$s
T/e )ank .as a)-e to ac/ieve )usiness success )ecause o, t/e operationa-
e,,icienc1 ma+e possi)-e )1 tec/no-ogies suc/ as Internet Banking*
Touc/:creen Banking* an+ Go)i-e $-erts to its customers. ue to ./ic/
customer .ere ver1 /app1.
F(%1s t+a%s'$+ #a1$ $as5
T/e )ank .as a)-e to intro+uce #;T :c/eme in ur)an c-operative )anks to
a,,ect remittances on )e/a-, o, t/eir customers to various p-aces in t/e
countr1. !n+er t/is service* ,un+s are trans,erre+ ,rom one p-ace to anot/er
Page
50
.it/in a s/ort time. T/is ,aci-it1 .as ma+e avai-a)-e to t/e customers o, co-
operative )anks recent-1. T/e sc/eme a-so ena)-e+ )etter customer service to
rura- an+ semi ur)an customers.
3(t!*$ 1$!,$+5 &"a%%$s
T/e )ank .as a)-e to provi+e $n1 Branc/ Banking service to its rura- an+
semi ur)an customers since 1<<5 )1 using /ig/-en+ so,t.are an+ /ar+.are
e>uipment an+ net.ork. T/e peop-e at :!CO Bank appreciate t/e va-ue o,
time an+ energ1 o, t/e customers. B1 intro+ucing Te-e-)anking ,aci-it1*
:!CO Bank /as ensure+ t/at t/e customers can access t/eir account +etai-s
t/roug/ te-ep/one -ines .it/out -eaving t/e com,ort o, t/eir /ome an+ not
/aving to trave- -ong +istances.
EFt$%1$1 T+a%sa&t!)% 4)(+s
:!CO Bank is t/e on-1 )ank to initiate transaction ,aci-ities )e1on+ t/e
regu-ar )anking transaction /ours. T/is amp-1 +isp-a1s t/e commitment o,
t/e )ank to customer service.
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51
CH. 14. CONC@!:ION
C)%&(s!)%:
No.* It is ver1 muc/ c-ear t/at co-operative )anks /ave ver1 muc/
importance in nationa- +eve-opment. Iit/out t/e /e-p o, co-operative )anks*
mi--ions o, peop-e in In+ia .ou-+ )e -acking t/e muc/ nee+e+ ,inancia-
support.
Co-operative )anks take active part in -oca- communities an+ -oca-
+eve-opment .it/ a stronger commitment an+ socia- responsi)i-ities. T/ese
)anks are )est ve/ic-es ,or taking )anking to +oorsteps o, common men*
un)anke+ peop-e in ur)an an+ rura- areas. T/eir presence in t/e socia-*
economic an+ +emocratic structure o, t/e countr1 is essentia- to )ring a)out
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52
/armonious +eve-opment an+ t/at per/aps is t/e )est 0usti,ication ,or
nurturing t/em an+ strengt/ening t/eir )ase. T/ese )anks are sure to .in in
t/e race )ecause t/e1 are ,rom t/e peop-e* )1 t/e peop-e an+ o, t/e peop-e.
BIB2IOGRAP4Y
Banking eve-opment In In+ia 1<=5-3445 - 'ro.t/*
Re,orms an+ Out-ook
6 by Niti Bhasin
Banking T/eor1 an+ "ractice
6 by K.C. Shekhar and Lekshmy Shekhar
Page
53
Co-operative Banks in In+ia 6 ;unctioning an+ Re,orms
6 by Amit Bhasak
AEBSITES
en..ikipe+ia.orgJ.ikiJCooperativeQ)anking.
....)anknetin+ia.comJ)ankingJcintro./tm.
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