2. The Cooperative Movement
• The historical roots of the Cooperative
Movement in the world days back to days of
misery and distress in Europe faced by common
people who had little or no access to credit to
fund their basic needs, in uncertain times.
• It was the idea of Hermann Schulze (1808-83)
and Friedrich Wilhelm Raiffeisen (1818-88)
which took shape as cooperative banks of today
across the world.
3. Cooperative Societies
• Co-operative societies are voluntary
associations started with the aim of service to
members.
• Hubert Calvert says, “Co-operation is a form of
organisation wherein persons voluntarily
associated together as human beings on the
basis of equality for the promotion of the
economic interest of themselves
4. • The Cooperative Credit Societies Act, 1904 led
to the formation of Cooperative Credit
Societies in both rural and urban areas.
5. • Indian cooperative structures are one of the
largest such networks in the world with more
than 200 million members.
• It has about 67% penetration in villages and
fund 46% of the total rural credit.
• It also stands for 36% of the total distribution
of rural fertilizers.
6. • 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.
• Co-operative banks are often created by persons
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...).
7. • Co-operative banks are regulated by the
Reserve Bank of India and governed by the
Banking Regulations Act, 1949, and Banking
Laws (Co-operative Societies) Act, 1965.
• Rural co-operative banks are regulated by
state registrar of co-operatives.
8. • Co-operative banks usually cater to the credit
needs of agriculturists.
• Co-operative banks offer a slightly higher rate
of interest to their depositors than
commercial banks.
• 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.
9. Structure of Cooperative Banks in
India
• They are categorized under two main heads:
• Agricultural and
• Non-agricultural.
10. • Agricultural credit segment is by far the
dominant part of the entire co-operative
credit structure.
• In the field of agricultural credit there are
separate institutions to meet the needs for
short and medium-term credit and for long-
term credit.
11. • The co-operative credit structure is three-tier.
• At the apex is the State Co-operative Bank (SCB)
in each state.
• Total 33 State cooperative banks.
• At the intermediate (district) level there are
Central Co-operative Bank (CCBs).
• Each distric have 1 CCB.
• At the village level there are primary agricultural
credit societies (PACS).
12. Urban and Rural Cooperatives
• Banking activities of Urban Cooperative Banks
are monitored by RBI.
• Registration and Management activities are
managed by Registrar of Cooperative Societies
(RCS).
13. • Rural Cooperatives
• The rural cooperatives are three tiered operating
in different states.
• These are-
• State Cooperative Banks- They operate at the
apex level in states
• District Central Cooperative Banks-They operate
at the district levels Primary Agricultural Credit
Societies-They operate at the village or grass-root
level.
14. Functions of Cooperative banks in
Rural india
• Cooperative banks in India finance rural areas
under:
Farming
Cattle
Personal finance etc
15. • Cooperative banks in India finance urban
areas under:
Self-employment
Industries
Small scale units
Home finance
Consumer finance
Personal finance
