Voluntary association of
members for self
help, catering to the
financial needs on a mutual
A financial entity which belongs to its members.
Members are both customers and owners at the
Created by persons belonging to same local or
professional community or sharing a common
They provide their members with a wide range of
banking and financial services
(loans, deposits, banking accounts etc).
Carried on no profit no loss basis
In India they are regulated with the RBI and governed
by Banking Regulations Act 1949 and cooperative
societies Act 1965.
Lower administrative costs on account of voluntary
services rendered by their members.
They fill a strong feeling of responsibility among their
members for punctual payment of interest and
repayment of loans.
They promote savings among their members and
mobilize their small savings for productive purposes.
Procedure of deposits and withdrawal is far less
complicated than a commercial bank, since personal
identification and such other problems don’t exist.
Provide loans to their members at lower rates.
Make their members financially more secure
Suitable to help for small means
PRIMARY CREDIT SOCIETIES
(VILLAGES, TOWNS, CITIES)
PRIMARY CREDIT SOCIETIES
(VILLAGES, TOWNS, CITIES)
They are the local or base level.
In rural areas there are PACs which cater to the short
and medium term credit needs of the farmers.
Their members have unlimited liabilities.
Members contribute in share capital.
Members elect president and other members of the
They raise funds by share capital, membership
fees, deposits of members and non-members and loans
from the district central cooperative banks and the
They are federations/group of primary credit
societies belonging to a specific district.
They manage their funds from share
capital, deposits, loans from State Cooperative Banks
and other commercial banks.
Membership is only
Membership is for
org. and individuals
Formed by federating all district central cooperative
banks in a particular state.
It is the apex bank of cooperative sector in India.
It raises its funds by way of share capital, deposits
from funds, surplus funds of the affiliated CCBs
reserve funds, loans from the SBI, other commercial
banks, and inter-bank borrowings.
They are supported by the RBI.
Between 50-90% of the working capital of the SCBs
are contributed by the RBI.
RURAL DEV. BANKS
Cooperative credit societies established in urban
Maharashtra-only those urban credit societies can
be called as ‘banks’ which conduct banking business
in accordance with Sec.277F of the Indian Companies
Act 1913 and should have paid up share capital
exceeding Rs. 20,000.
They meet needs of specific types or group of
Also called PRIMARY COOPERATIVE BANKS (PCBs) by
“small sized cooperatively organized banking units
which operate in metropolitan, urban and semi-urban
centres to cater mainly the needs of small borrowers, viz.,
owners of small scale industrial units, retail traders,
professionals and salaried classes”.
The Urban Banks Dept. established in the RBI in 1984,
monitors and regulates the growth of PCBs.
Objective:- promoting savings and self help among the
middle class population and providing credit facilities to
the people with small means in the urban/semi-urban
Regulated and supervised by:-
In case of single-state cooperative banks:- State
Registrars of Cooperative Societies (RCS)
In case of multi-state cooperative banks:- the RBI
Following the recommendation of the National
Federation of Urban Cooperative Banks, the RBI
decided to include in the 2nd Schedule of the RBI
Act, 1934, all licensed urban cooperative banks whose
total deposit are Rs. 50 crores and above and whose
methods of operations and working are satisfactory.
From Sep. 1, 1988, the following 11 urban cooperative
banks have been included in the 2nd Schedule:-
The Abhyudaya Cooperative Bank Ltd.
The Bombay Mercantile Cooperative Bank Ltd.
The Development Cooperative Bank Ltd.
Janata Sahakari Bank Ltd.
Kalupur Commercial Cooperative Bank Ltd.
Rajkot Nagrik Sahakari Bank Ltd.
Rupee Cooperative Bank Ltd.
Sangli Urban Cooperative Bank Ltd.
Saraswat Cooperative Bank
Shamrao Vithal Cooperative Bank Ltd.
The Surat People’s Cooperative Bank Ltd.
The banks which are not included in the 2nd
schedule of RBI act 1934.
These also have to maintain statutory cash reserve
ratio but not with RBI.
Their banking activities are limited. For e.g.:- they
cannot deal in foreign exchange.
The share of these banks are almost nil.
Following are few non-scheduled banks:-
Akhand Cooperative Bank Ltd.
Apani Sahkari Bank Ltd.
Baroda Traders Cooperative Bank Ltd.
Citizen Cooperative Bank Ltd.
Financial Cooperative Bank Ltd.
COMMERCIAL BANKS COOPERATIVE BANKS
• Joint stock company.
• Governed by Banking
• Subject to control of the
• More Scope
• Larger scale
• Public and private banks
• Borrowers don’t have any
voting rights as such
• Governed by Cooperative
Societies Act 1956
• Subject to rules laid down
by Registrar of
• Lesser scope
• Smaller scale
• Private sector banks
• Borrowers have some
influence on the lending
policy of the banks