Co-operative Banks

Cooperative banks cater to financing needs of agriculture, retail trade, small industry and self-employed businessmen in urban, semi-urban and rural areas of India. The credit structure of these banks differs across urban and rural areas , across states and loans maturities. Urban areas are served by urban cooperative banks (UCBs), whose operations are either limited to one state of stretch across states.

The rural cooperative banks comprise State cooperative banks, district central cooperative banks, SCARDBs and PCARDBs.

This sector is the oldest segment of the India Banking system. The network of UCBs in India consisted of 1721 banks as at end-March of UCBs in India consisted of 1721 banks as at end – March 2009 , while the number of rural cooperative banks was 1119 as at end- March 2008. Owing  to their widespread geographical penetration , cooperative banks have the potential to become an important instrument for large scale financial inclusion , provided they are financially strengthened . The RBI and the National Agriculture and Rural Development Banks (NABARD) have taken a number of measures in recent years to improve financial soundness of cooperative banks.

Note: As August 2011 , 38 foreign banks representing 24 countries are operating in india.

Types Of Cooperative Banks

  1. Primary Agricultural Credit SocietiesThese societies operate in villages . In most of the states , more then 10 person can form a cooperative credit society. These societies accept deposits from their members and provide them short term and medium term loans. Presently , about 92000 primary cooperative credit societies are functioning in India.
  2. Central Cooperative BanksThese banks supervise primary cooperative societies of a district or any part of it . These banks also provide financial assistance to such societies. Number of such banks is approximately 369 at present.
  3. State Cooperative BanksEvery state has a main cooperative bank that runs all the central cooperative banks in that state. It also lends money to them.
  4. Primary cooperative Agriculture and Rural Development BanksThese banks advance long term loans on the security of immovable property that is mortgaged with them by the debtors.
  5. State cooperative Agriculture and Rural Development BanksThese banks advance loans to Primary Cooperative Agriculture  and  Rural Development  Banks . Entire state comes under their jurisdiction . They are 20 In number at present.
  6. Urban Cooperative BanksThese banks operate in urban areas and accept deposits from the public and also advance loans to them. Presently , these banks are supervised by the Reserve Bank of India (RBI) . These are managed by the state government . Their number is 1854 at present.

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