Cooperative Banks In India
A cooperative bank is a financial institution that is owned and operated by a group of individuals. cooperative banks in India are classified into two types: urban cooperative banks (UCBs) and rural cooperative banks (RCBs). UCBs are further classified into primary cooperative banks (PCBs) and central cooperative banks (CCBs).
Rural cooperative banks (RCBs) are banks that operate in rural areas with the primary objective of providing banking and financial services to the rural population. RBI has been encouraging the growth of rural cooperative banks as they play an important role in rural economic development.
As of March 2019, there were 1790 rural cooperative banks in India with a total network of 40,924 branches. The top 5 states in terms of the number of rural cooperative banks are Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Uttar Pradesh.
Urban cooperative banks (UCBs) are banks that operate in urban areas. They are generally local banks that cater to the banking needs of the urban population. As of March 2019, there were 2742 urban cooperative banks in India with a total network of 61,233 branches. The top 5 states in terms of the number of urban cooperative banks are Maharashtra, Karnataka, Tamil Nadu, Gujarat, and Kerala.
PCBs are the smallest type of UCBs with a minimum of 10 members and a maximum of 300 members. As of March 2019, there were 1716 primary cooperative banks in India with a network of 11,383 branches. The top 5 states in terms of the number of primary cooperative banks are Maharashtra, Karnataka, Tamil Nadu, Gujarat, and Kerala.
CCBs are the largest type of UCBs with a minimum of 250 members and no maximum limit. As of March 2019, there were 926 central cooperative banks in India with a network of 49,850 branches. The top 5 states in terms of the number of central cooperative banks are Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Uttar Pradesh.
The number of cooperative banks has been increasing in recent years. This is due to the fact that cooperative banks are able to provide banking services to a wide range of customers, including small businesses and farmers. In addition, cooperative banks are seen as an alternative to traditional banks, which are often seen as being too big and impersonal.
The Reserve Bank of India (RBI) is the central bank of India and is responsible for the regulation and supervision of cooperative banks. The RBI has stipulated a number of guidelines that cooperative banks must follow, such as maintaining a minimum capital adequacy ratio of 9%, maintaining a provision for bad and doubtful debts of 5%, and following the Reserve Bank of India Act, 1949.
The RBI has also introduced a number of initiatives to promote the growth of cooperative banks. These include the setting up of a dedicated Cooperative Banks Department, the launch of the Banking Ombudsman Scheme for Cooperative Banks, and the extending of the regulatory and supervisory powers of the RBI to include cooperative banks.
The government of India is also taking steps to support the growth of cooperative banks. The government has set up a National Bank for Agriculture and Rural Development (NABARD) which provides financial assistance to cooperative banks. The government has also reintroduced the Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme, which provides insurance cover for deposits in cooperative banks.
The growth of cooperative banks is important for the development of the Indian economy. Cooperative banks play a key role in providing banking and financial services to a wide range of customers, including small businesses and farmers. In addition, cooperative banks are seen as an alternative to traditional banks, which are often seen as being too big and impersonal. The government of India and the RBI are taking steps to support the growth of cooperative banks and it is hoped that this will lead to a stronger and more vibrant banking sector in India.
10 important topics to study in “Cooperative Banks in India”.
1.The History of Indian Cooperative Banking
2.The Structure of the Indian Cooperative Banking Sector
3.The Regulation and Supervision of Indian Cooperative Banks
4.The Performance of Indian Cooperative Banks
5.The Challenges Facing Indian Cooperative Banks
6.The Future of Indian Cooperative Banks
7.What are Primary Agricultural Credit Societies?
8.What are Secondary Agriculture Credit Societies?
9.What is a Central Cooperative Bank?
10.What is a State Cooperative Bank?
