FUNCTIONING OF CO-OPERATIVE BANKS

A rough draft made in partial fulfillment of the course LAW OF

BANKING AND FINANCE, 8th semester during the academic year
2019-20.

Submitted by

Anju Bala
Roll no. 1512
B.A. LL.B. (Hons.)

Submitted to
Prof. Dr. Ajay Kumar
Faculty of Law Of Banking And Finance

March 2020

Chanakya National law University, Meethapur, Patna, 800002

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 DECLARATION

I hereby declare that the work reported in the B.A. LL.B (Hons.) Project Report entitled
‘Functioning Of CO-Operative’ submitted at Chanakya National Law University, Patna
is an authentic record of my work carried out under the supervision of Prof. Dr. Ajay Kumar.
I have not submitted this work elsewhere for any other degree or diploma. I am fully
responsible for the contents of my Project Report.

Anju Bala

Roll no: 1512

B.A.LL.B(Hons.)

8th Semester

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 ACKNOWLEDGEMENT

I would like to thank my faculty Prof. Dr. Ajay Kumar whose assignment on Financing Of
CO-Operative such a relevant topic made me work towards knowing the subject with a
greater interest and enthusiasm.

I owe the present accomplishment of my project to my friends, who helped me immensely

with the sources of research materials throughout the project and without whom I couldn’t
have completed it in the present manner.

I would also like to express my gratitude to my parents and all those unseen hands who
helped me out at every stage of my project.

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 Table of contents

Declaration .............................................................................................................

Acknowledgement..................................................................................................

Table of content.....................................................................................................

Introduction ...........................................................................................................

Aims And Objective..............................................................................................

Hypothesis.............................................................................................................

Chapterization.......................................................................................................

1. Introduction..................................................................................................
2. Pyramid structure of co-operative banks.......................................................
3. Functions of co-operative banks in India .......................................................
4. Avantages and weaknesses of co-operative banks .........................................
5. conclusion.......................................................................................................

Bibliography

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 Chapter I : INTRODUCTION
Co-operative Banks:-

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 of sharing a common interest.
Cooperative banks generally provide their members with a wide range of banking and
financial services (loans, deposits, banking accounts, etc.). Co- operative banks differ from
stockholders bank by their organization, their goals, their values and their governance. In
most countries, they are supervised and controlled by banking authorities and have to respect
prudential banking regulations, which put them at a level playing field with stockholders
banks. Depending on countries, this control and supervision can be implemented directly by
state entities or delegated to a co-operative federation or central body. All the co-operative
banks share common features as described below.1

History of Cooperative Banking in India:

Cooperative movement in India was started primarily for dealing with the problem of rural
credit. The history of Indian cooperative banking started with the passing of Cooperative
Societies Act in 1904. The objective of this Act was to establish cooperative credit societies
“to encourage thrift, self-help and cooperation among agriculturists, artisans and persons of
limited means.”
Many cooperative credit societies were set up under this Act. The Cooperative Societies Act,
1912 recognised the need for establishing new organisations for supervision, auditing and
supply of cooperative credit. These organisations were- (a) A union, consisting of primary
societies; (b) the central banks; and (c) provincial banks.
Although beginning has been made in the direction of establishing cooperative societies and
extending cooperative credit, but the progress remained unsatisfactory in the pre-
independence period. Even after being in operation for half a century, the cooperative credit
formed only 3.1 per cent of the total rural credit in 1951-52.2

Customer-Owned Entities:
1
Cooperative banks https://sarkaribank.com/function-of-co-operative-bank/ retrieved at: 1:05pm 29-02-2020
2
Histroy of cooperative banks in India http://www.economicsdiscussion.net/india/cooperative-
banking/cooperative-banking-in-india-history-structure-importance-and-weaknesses/31365 retrieved at: 1:04pm,
29-02-2020

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 In a co-operative bank, the needs of the customers meet the needs of owners, as co-operative
bank members are both i.e., customer and owner. As a consequence, the first aim of the
cooperative bank is not to maximize the profit but to provide the best possible products and
services to its members. Some co-operative banks only operate with their members but most
of them also admit non-member clients to benefit from their banking and financial services.

Democratic Member Control: Co-operative banks are owned and controlled by the members,
who democratically elect the board of the directors. Members usually have equal voting
rights, according to the cooperative principle of “one person, one vote”.

Profit Allocation: In a co-operative bank, a significant part of the yearly profit, benefits or
surplus is usually allocated to constitute reserves. A part of this profit can also be distributed
to the co-operative members, with legal and statutory limitations in most cases. Profit is
usually allocated to members either through patronage dividend, which is related to the use of
co-operative products and services by each member, or through an interest or a dividend,
which is related to the number of shares subscribed by each member.

Co-operative Banking in India :-

The co-operative banks in India have a history of almost 100 years. The co-operative banks
are an important constituent of the Indian Financial System, judging by their role assigned to
them, the expectations they are supposed to fulfil, their number, and the number of offices
they operate. The co-operative movement was originated in the west, but the important that
such bank have assumed in India is rarely paralleled anywhere else in the world. Their role in
rural financing continues to be important event today, and their business in urban areas also
has increased phenomenally in recent years mainly due to the sharp increase in the number of
primary cooperative banks. Co-operative banks in India are registered under the Cooperative
Societies Act. The co-operative banks are also regulated by the Reserve Bank of India (RBI)
and governed by Banking Regulations Act 1949 and Banking Laws (Co-operative Societies)
Act, 1955.3

Establishment of Co-operative Banks in India

3
Cooperative banks https://sarkaribank.com/function-of-co-operative-bank/ retrieved at: 1:05pm 29-02-2020

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The co-operative banks in India are well established financial service organization. The first
legislation on cooperation was passed in 1904. In 1914, the Maclagen Committee envisaged a
three tier structure of cooperative banking, viz., Primary Agricultural Credit Services (PACs)
at the grass root level, Central Co-operative Banks at the district level and State Co-operative
Banks at State level or Apex level. The first urban cooperative bank in India was formed
nearly 100 years back in Baroda.

The co-operative banks arrived in India in the beginning of 20th Century as an official effort
to create a new type of institution based on the principles of co-operative organization and
management, suitable for problems peculiar to Indian conditions. These banks were
conceived as substitutes for money lenders, to provide timely and adequate short-term and
long-term institutional credit at reasonable rates of interest.

In the formative stage, Co-operative banks were urban co-operative societies run on
community basis and their lending activities were restricted to meeting credit requirements of
their members. The concept of Urban Cooperative Bank was first spelt out by Mehta
Bhansali Committee in 1939 which defined on Urban Co-operative Bank. Provisions of
Section 5 (CCV) of Banking Regulations Act, 1949 (as applicable to Co-operative Societies)
defined an Urban Co-operative Bank as a Primary Co-operative Bank other than a Primary
Co-operative Society was made applicable in 1966.4

The co-operative banking structure in India is bifurcated into Shortterm structure and Long-
term structure. While the short-term structure is three tier structures, long-term co-operative
banking structure is the two tier structures as mentioned below:

Short-Term Co-operative Bank Structure 

 A State Co-operative Bank works at the apex level (ie. works at state level)
 The Central Co-operative Bank works at the Intermediate Level(i.e., District Co-
operative Banks ltd. works at district level)
 Primary co-operative credit societies at base level (At village level)

Long-Term Co-operative Bank Structure;-

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  State Co-operative Agriculture and Rural Development Banks (SCARDBs) at the
apex level.
 Primary Co-operative Agriculture and Rural Development Banks (PCARDBs) at the
district level or block level.

Role of Co-operative Banks in India:-

The co-operative banks in India play an important role even today in rural financing. The
businesses of co-operative banks in the urban areas also have increased phenomenally in
recent years due to the sharp increase in the number of primary co-operative banks. The co-
operative banks are expected to perform some duties, namely, extend all types of credit
facilities to customers in cash and kind, advance consumption loans, extend banking facilities
in rural areas, mobilize deposits, supervise the use of loans etc. The needs of co-operative
bank are different.

Review Of Literature:-

Aims and Objective:-

The researcher has undertaken this research to find out about-
1. To know how co-operative banks engage in rural financing and micro-financing.
2. to know that how co-operative banks ensure credit services to farmers at the low rate
of interest providing the socioeconomic condition to the people.

Hypothesis:-
Before doing the research work, the researcher had certain hypothesis which were to be tested
during research. The hypothesis is following-
 Functions of co-operative banks vis-a-vis other banks.
 Employment in cooperative banks is more stable compared with private banks and
saving banks.

Research Methodology :
The researcher would like to follow doctrinal method for this research. The researcher will
gather data from both the primary and secondary sources.

Sources of Data :
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The researcher has relied on the following secondary sources of data:
 Books
 Websites
 Articles

Scope of the Study:

The researcher has used the doctrinal method and has relied on the secondary sources for the
content of the research paper.
Owing to the large number of topics that could be included in the project, the scope of this
research paper is exceedingly vast. However in the interest of brevity, this paper has been
limited to the topics which deal with social aspect of the topic only.

Chapter II : PYRAMID STRUCTURE OF CO-OPERATIVE BANKS

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Cooperative bank is an institution established on the cooperative basis and dealing in
ordinary banking business. Like other banks, the cooperative banks are founded by collecting
funds through shares, accept deposits and grant loans.

There are different types of cooperative credit institutions working in India. These institutions
can be classified into two broad categories- agricultural and non-agricultural. Agricultural
credit institutions dominate the entire cooperative credit structure.
Agricultural credit institutions are further divided into short-term agricultural credit
institutions and long-term agricultural credit institutions.
The short-term agricultural credit institutions which cater to the short-term financial needs of
agriculturists have three-tier federal structure- (a) at the apex, there is the state cooperative
bank in each state; (b) at the district level, there are central cooperative banks; (c) at the
village level, there are primary agricultural credit societies.
Long-term agricultural credit is provided by the land development banks. The whole structure
of cooperative credit institutions is shown in the chart given.
The co-operative banks are small-sized units which operate both in urban and non-urban
centers. They finance small borrowers in industrial and trade sectors besides professional and
salary classes. Regulated by the Reserve Bank of India, they are governed by the Banking
Regulations Act 1949 and banking laws (co-operative societies) act, 1965.5

Pyramid Structure of Co-operatives banks:-

State Cooperative banks:-

It is a federation of central Co-operative bank and acts as a watchdog. They obtain their funds
from share capital, deposits, loans and overdrafts from the Reserve Bank of India and can
lend money to central co-operative banks and primary societies and not directly to the
6
farmers. . The State Co-operative Banks (SCBs) or the Apex Banks occupy a crucial position
in the three tier co-operative credit structure in India. These Apex Banks or State Co-
operative Banks are formed by federating DCCBs in each state. The Apex Banks assume a
key-position in the co-operative credit structure because the financial assistance from RBI
and the National Bank for Agriculture and Rural Development are invariably routed through
them
5
Structure of co-operative banks https://shodhganga.inflibnet.ac.in/bitstream/10603/20846/5/05_chapter
%203.pdf retrieved at: 1:45pm 29-02-2020
6
https://sarkaribank.com/function-of-co-operative-bank/ retrieved at: 1:45pm 29-02-2020

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District Central Cooperative Bank:-
These are the federations of primary credit societies in a district and are of two types-those
having a membership of primary societies only and those having a membership of societies as
well as individuals. The funds of the bank consist of share capital, deposits, loans and
overdrafts from state co-operative banks and joint stocks. These banks provide finance to
member societies within the limits of the borrowing capacity of societies. They also conduct
all the business of a joint stock bank.7 District Central Co-operative Banks (DCCBs) occupy
the middle level position in the three tier co-operative credit structure of the country. In the
beginning of the formation of PACSs, they could not function effectively without gaining
financial support from an outside agency. The formation of DCCBs was thus a felt need for
mutual help. The Co-operative Societies Act of 1912 permitted the registration of DCCBs.
Even before the enactment of this Act, some DCCBs were established to cater to the needs of
primary societies. In 1906, forerunner of the first DCCB was established as a primary society
in Uttar Pradesh. At Ajmer in Rajasthan the first DCCB was established in 1910. But the first
full-fledged DCCB as per the provisions of the Act of 1912 was started in Jabalpur District of
the Central Province.

The DCCBs are formed mainly with the objective of meeting the credit requirements of
member societies. As an institution for helping the societies in times of need, they finance
agricultural credit societies for production purposes, marketing societies for marketing
operations, industrial societies for supply operations and other societies for working
expenses. In short, the major objectives of the DCCBs are to provide loans to affiliated
societies, to act as a balancing centre of finance for primary societies, to arrange for the
supervision and control of the affiliated societies, to raise deposits from members and non-
members, to convene conferences of the member societies and also prescribe uniform
procedure for the working of primary societies, to open branches of the bank at important
places with the permission of the Registrar of Co-operative Societies and to maintain and
utilise state partnership. Generally, the area of operation of a DCCB is limited to one district.

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Primary Agriculture credit services:-
The primary cooperative credit society is an association of borrowers and non-borrowers
residing in a locality. The funds of the society are derived from the share capital and deposits
of members and loans from central cooperative banks. The borrowing powers of the members
as well as of the society are fixed. The loans are given to members for the purchase of cattle,
fodder, fertilizers, pesticides, etc.

Primary Agricultural Credit Societies (PACS) are the foundation of the co-operative credit
structure and form the largest number of co-operative institutions in India. Most of these
societies have been organised mainly to provide credit facilities and to inculcate the habit of
thrift and economy among their members.

The share capital of a society is divided into units, called shares, contributed by the members.
The most important source of finance of PACS is members' deposits. Borrowings constitute
the most important element of their working capital. The criteria for borrowings differ from
state to state according to their liability. Punctuality in the repayment of loans has hardly been
observed by the members with the result that there has been a steep rise in the amount of
overdues all over the country.

In India, PACS are passing through an era of crisis. Increasing incidence of non-viability is
one of the major setbacks. PACS have made little progress in attracting deposits. In majority
of the cases, the deposits were collected through book adjustments by carving certain portion
of loan amount. The repaying capacity of the PACS has been dwindled considerably,
resulting mounted overdues in the loan outstanding against members. Along with the
increasing volume of business the number of PACS running into loss and the amount of loss
has increased considerably over the years.8

Chapter III : FUNCTIONS OF CO-OPERATIVE BANKS IN INDIA

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Co-operative banks also perform the basic banking functions of banking but they differ from
commercial banks in the following respects:-

1) Commercial banks are joint-stock companies under the companies’ act of 1956, or public
sector bank under a separate act of a parliament whereas co-operative banks were
established under the co-operative societies acts of different states.
2) Commercial bank structure is branch banking structure whereas Cooperative banks have a
three tupe setup, with State Co-operative Bank at Apex level, Central / District Co-
operative Bank at district level, and Primary Co-operative Societies at rural level.
3) Only some of the sections of Banking Regulation Act of 1949 (fully applicable to
commercial banks), are applicable to co-operative banks, resulting only in partial control
by RBI of co-operative banks and
4) Co-operative banks function on the principle of cooperation and not entirely on
commercial parameters.9
5) They function with the rule of “one member, one vote” and function on “no profit, no
loss” basis
6) It performs all the main banking functions of deposit mobilization, the supply of credit
and provision of remittance facilities
7) It provides financial assistance to the people with small means to protect them from the
debt trap of the moneylenders
8) It is engaged in tasks of production, processing, marketing, distribution, servicing and
banking in India
9) It supervises and guides affiliated societies
10) Mobilization of funds from their members
11) Advance loans to the members
12) Rural financing for farming, cattle, milk, hatchery, personal finance, etc.
13) Urban financing for Self – employment, Industries Small scale units, Home finance,
Consumer finance, Personal finance.10

9
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%203.pdf retrieved at: 2:16pm 29-02-2020
10
Functions of cooperative banks https://sarkaribank.com/function-of-co-operative-bank/ retrieved at: 29-02-
2020 2:20pm

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Chapter IV : ADVANTAGES AND WEAKNESSES OF CO-OPERATIVE
BANKS

Advantages:-

 Easy to form
 No obstruction for membership
 Limited liability

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  Service motive
 Democratic management
 Stability and Continuity
 Economic operations
 State patronage

Other Advantages of cooperative credit institutions:-

Alternative Credit Source:

The main objective of cooperative credit movement is to provide an effective alternative to
the traditional defective credit system of the village money lender. The cooperative banks
tend to protect the rural population from the clutches of money lenders. The money lenders
have so far dominated the rural areas and have been exploiting the poor people by charging
very high rates of interest and manipulating accounts.

Cheap Rural Credit:

Cooperative credit system has cheapened the rural credit both directly as well as indirectly:
(a) Directly, because the cooperative societies charge comparatively low interest rates, and
(b) Indirectly, because the presence of cooperative societies as an alternative agency has
broken money lender’s monopoly, thereby enforcing him to reduce the rate of interest.

Productive Borrowing:
An important benefit of cooperative credit system is to bring a change in the nature of loans.
Previously the cultivators used to borrow for consumption and other unproductive purposes.
But, now, they mostly borrow for productive purposes. Cooperative societies discourage
unproductive borrowing.11

Encouragement to Saving and Investment:

Cooperative credit movement has encouraged saving and investment by developing the habits
of thrift among the agriculturists. Instead of hoarding money the rural people tend to deposit
their savings in the cooperative or other banking institutions.

Improvement in Farming Methods:

Cooperative societies have also greatly helped in the introduction of better agricultural
methods. Cooperative credit is available for purchasing improved seeds, chemical fertilizers,

11
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modern implements, etc. The marketing and processing societies have helped the members to
purchase their inputs cheaply and sell their produce at good prices.

Role of Cooperative Banks before 1969:

Till the nationalisation of major commercial banks in 1969, cooperative societies were
practically the only institutional sources of rural credit. Commercial banks and other financial
institutions hardly provided any credit for agricultural and other rural activities. Cooperative
credit to the agriculturists as a percentage of total agricultural credit increased from 3.1 per
cent in 1951-52 to 15.5 per cent in 1961-62 and further to 22.7 per cent in 1970-71.
On the other hand, the agricultural credit provided by the commercial banks as a percentage
of total agricultural credit remained almost negligible and fell from 0.9 percent in 1951-52 to
0.6 percent in 1961-62 and then rose to 4 per cent in 1970-71.

Suitable Federal Structure of Cooperative Banking System:

Cooperative banking system has a federal structure with- (a) primary agricultural credit
societies at the village level, (b) higher financing agencies in the form of central cooperative
and state cooperative banks, (c) land development banks for providing long- term credit for
agriculture. Such a banking structure is essential and particularly suited for effectively
meeting the financial requirements of the vast rural areas of the country.
Considering the great importance of cooperative banks, particularly in the rural areas, it is not
surprising that every committee or commission, that has examined the working of the
cooperative banking system in India, has expressed the common view that “cooperation
remains the best hope of rural India.”

Weaknesses of Co-operative banks:-

Various committees, commissions and individual studies that have reviewed the working of
the cooperative banking system in India have pointed out a number of weaknesses of the
system and have made suggestions to improve the system.

1. They are too small to be economical and viable; besides too many of them are
dormant, existing only on paper
2. Co-operative banks are not doing well in all the states; only a few accounts for a
major part of their business
3. These banks still rely very heavily on refinancing facilities from the government, the
RBI, and NABARD

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 4. They suffer from dangerously low or weak quality of loan assets, and from the highly
unsatisfactory recovery of loans.
5. They do not look like banks and do not inspire confidence in the potential members,
depositors, and borrowers.
6. Most of the Co-operative banks are suffering from a lack of professional
management.
7. Except for some Co-operative banks, technological development in Information
Technology or computerized data management is conspicuously absent.12
8. As there is no formal system of corporate governance in co-operative banks, many
banks have become the hotbed of political patronage, unscrupulous financial practice,
and gross mismanagement.
9. Another problem arises out of the duality of control over them i.e. these banks are
organized under the dual control of RBI and as well as respective state government.
10. They unduly depend on government capital rather than member capital.

Major weaknesses are given below:

General Weaknesses of Primary Credit Societies:

Organisational and financial limitations of the primary credit societies considerably reduce
their ability to provide adequate credit to the rural population.
The All India Rural Credit Review Committee pointed out the following weaknesses of
the primary credit societies:
(a) Cooperative credit still constitutes a small proportion of the total borrowings of the
farmers,
(b) Needs of tenants and small farmers are not fully met.
(c) More primary credit societies are financially weak and are unable to meet the production-
oriented credit needs,
(d) Overdues are increasing alarmingly at all levels,

(e) Primary credit societies have not been able to provide adequate and timely credit to the
borrowing farmers.

Inadequate Coverage:

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retrieved at: 29-02-2020 2:27pm

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Despite the fact that the cooperatives have now covered almost all the rural areas of the
country, its rural household membership is only about 45 per cent. Thus, 55 per cent of rural
households are still not covered under the cooperative credit system.
In fact, the borrowing membership of the primary credit societies is significantly low and is
restricted to a few states like Maharashtra, Gujrat, Punjab, Haryana, Tamil Nadu and to
relatively rich land owners.

Inefficient Societies:
In spite of the fact that the primary agricultural credit societies in most of the states have been
reorganised into viable units, their loaning business has not improved. As the Seventh Plan
has observed that out of 94089 primary agricultural credit societies in the country in 1982-83,
only 66000 societies had full time paid secretaries. About 34000 societies were running at
loss.13

Problem of Overdues:
A serious problem of the cooperative credit is the overdue loans of the cooperative
institutions which have been continuously increasing over the years. In 1991-92, percentage
of overdues to demand at the level of land development banks was 57, at the level of central
cooperative banks was 41 and at the level of primary agricultural credit societies was 39.
The overdues in the short-term credit structure are most alarming in North-Eastern States. In
the long-term loaning sector, the problem of overdues has almost crippled the land
development banks in 9 states, viz., Maharashtra, Gujarat, Madhya Pradesh, Bihar,
Karnataka, Assam, West Bengal, Orissa and Tamil Nadu.
Large amounts of overdues restrict the recycling of the funds and adversely affect the lending
and borrowing capacity of the cooperative societies.

Regional Disparities:
There have been large regional disparities in the distribution of cooperative credit. According
to the Seventh Plan, the eight states of Andhra Pradesh, Gujarat, Haryana, Kerala, Madhya
Pradesh, Maharashtra, Punjab and Rajasthan account for about 80 per cent of the total credit
disbursed. The per hectare short-term credit disbursed varied from Rs. 4 in Assam to Rs. 718
in Kerala.

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Benefits to Big Land Owners:
Most of the benefits from the cooperatives have been covered by the big land owners because
of their strong socio-economic position. For instance, in 1984-85 the farmers having holdings
less than two hectares got only 38.8 per cent of the total loans granted by the primary
agricultural credit societies, whereas the land owners with holdings of more than 2 hectare
received 55 per cent. The share of the poorest rural population (i.e. tenants, share croppers
and landless labours) was only 6.2 per cent.14

Lack of Other Facilities:

Besides the provision of adequate and timely credit, the small and marginal farmers also need
other facilities in the form of supply of inputs (i.e., better seeds, fertilisers, pesticides, etc),
extension and marketing services.
These facilities will enable them to utilise the borrowed credit in a proper way. Therefore, the
credit societies should be reorganised into multi-purposes cooperatives.

Difference between Co-operative banks & Commercial banks:

CO-OPERATIVE BANKS:-

1) Federal Structure in nature, i.e. at the top level State Co operative Banks and at the
village level primary Co-operative Credit Societies.
2) They are generally concentrating on rural credit & provide credit facilities to
agricultural & rural activities.
3) In co-operative Bank the borrowers are usually their members.
4) The Co-operative Banks provide a little higher rate of interest on deposits as compared
to commercial banks.

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 COMMERCIAL BANKS:-

1) They are functioning on the branch banking & the branches are located in all areas of
rural, urban, etc., the head office contain branches through Zonal Office.
2) They are mainly concentrating on the requirements of trade & industry.
3) Borrowers can be any including individual institutions.
4) The Commercial Banks provide a lesser rate of interest as compared to co-operative
banks.

Chapter V : CONCLUSION

Cooperative banks play an integral part in the implementation of development plans and are

important for the effective functioning of the banking system in India. India is termed as an

underbanked country, and after so many scams, it is need of the hour to take necessary

measures to remedy the lucane and to boost the confidence and trust of the public in the

banking system. 

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. It is often established by people belonging

to the same local or professional community having a common interest. It is formed to

promote the upliftment of financially weaker sections of the society and to protect them from

the clutches of money lenders who provide loans at an unreasonably high-interest rate to the

needy. The co-operative structure is designed on the principles of cooperation, mutual help,

democratic decision making and open membership. It follows the principle of ‘one

shareholder, one vote’ and ‘no profit, no loss’.

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Cooperatives Banks are registered under the Cooperative Societies Act, 1912. These are

regulated by the Reserve Bank of India and National Bank for Agriculture and Rural

Development (NABARD) under the Banking Regulation Act, 1949 and Banking Laws

(Application to Cooperative Societies) Act, 1965.

Cooperative banks differ from commercial banks on the grounds of organisation, governance,

interest rates, the scope of functioning, objectives and values.

BIBLIOGRAPHY

Websites:-

 https://sarkaribank.com/function-of-co-operative-bank/
 https://shodhganga.inflibnet.ac.in/bitstream/10603/20846/5/05_chapter%203.pdf
 http://www.economicsdiscussion.net/india/cooperative-banking/cooperative-banking-in-
india-history-structure-importance-and-weaknesses/31365
 http://www.economicsdiscussion.net/india/cooperative-banking/cooperative-banking-in-
india-history-structure-importance-and-weaknesses/31365
 https://www.theguardian.com/business/blog/2014/oct/23/co-op-bank-mishmash-
conclusions-treasury-report

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