The co-operative banks are government backed financial institutions that work on the principle of co-operation, self-help and mutual help. The co-operative banks are mainly set up to provide access to credit in rural areas. This empowers and secures the poor and the low income groups.
Co-operative banks offer basic banking functions and services in rural, urban and semi-urban areas, where banking facilities are scarce. Unlike commercial banks whose sole purpose is profit making, co-operative banks help encourage rural business and the agricultural sector and work towards growth.
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Listed below are some of the key objectives of a co-operative bank:
See Also: Co-operative Banks in India
The co-operative banks are set up to cater to different types of customers and their credit requirements. These banks aim to solve the rural credit issues and other financial problems pertaining to the rural masses. The co-operative banks have empowered people by strengthening the rural and urban financing sector.
See Also: List of Banks in India
The most crucial contribution of co-operative banks is the role they play in offering rural financing and micro-financing services to the rural people. The co-operative banks can be categorised into two types based on their function:
Long-term co-operative credit institutions operate on three levels. They are the state level, district level and village level.
See Also: List of Scheduled Banks in India
Short-term co-operative credit institutions can be further divided into the following types:
Considering the structure of co-operative banking in India, the co-operatives can be categorized into 5 groups:
See Also: Rural Banking in India
Primary Urban Co-Operative Banks (PUCBs): These banks offer services in the urban and semi-urban areas of India. The primary function of these co-operative banks is:
Primary Agriculture Credit Society (PACs): These institutions mainly perform the following functions:
District Central Co-Operative Bank (DCCBs): The primary agricultural societies are affiliated to the district central co-operatives. The main functions of the DCCBs are:
State Co-operative Banks (SBCs): The state co-operative banks serve as the supervisory authority to the DCCBs. The SBCs are again supervised by NABARD. The SBCs serve as leaders of the co-operatives in the state.
Land Development Banks (LDBs): The land development banks are a subsidiary unit of the co-operatives, which mainly offer long-term capital to meet the requirements of the agricultural sector. The main functions of the LDBs are:
The main services and products offered by co-operative banks are listed below:
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