Co-Operative Banks In India

Co-operative banks are special type of banking in which people co-operate with each other with a view to promote their mutual interest. So, we could say that Co-operative banks are not functioning entirely on commercial boundary; they work on the principle of cooperation.

Co-operative banks in India are registered under the co-operative societies act. This is regulated by RBI. They are governed by the Banking Regulations Act, 1949 and Banking Laws (Co-operative Societies) Act, 1965.

Co-operative banks have a three tier structure with state co-operative banks at apex level, district central co-operative banks at district level and primary co-operative societies at rural level.

Apex authorities of these Co-operative Banks

  • RBI and the Registrar of Co-operative Societies (RCS) of the particular state in the case of Primary co-operative societies  and
  • Nabard, the RBI and the Registrar of Co-operative Societies (RCS) in the case of the district and state co-operative banks.

Co-operative banks in India Finance the rural areas under

Co-operative banks in India Finance the urban areas under

  • Personal Finance
  • Home Finance
  • For starting  own business
  • To finance small scale units

Advantage of Co-operative banks in India

  • It gives loan to farmers and lower income group at a lower rate of interest.
  • Co-operative banks are required to send their 10% profit on the rural development so they play an important role in the growth of rural areas.
  • It encourages people to save some money from their daily or monthly income.