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ROLE OF URBAN COOPERATIVE BANKING IN SOCIO-ECONOMIC DEVELOPMENT

Head, Dept. of Commerce & Business Administration, Acharya Nagarjuna University.

Prof. Noor Basha Abdul Ph.D

Asst. Prof., Dept. of Business Administration, KBN College PG Centre, Vijayawada, Andhra Pradesh

G. David Raju MBA, M.Phil., (Ph.D.)

Abstract Policy makers and community developers are increasingly interested in alternative models for local businesses that will be both responsive to community needs as well as stimulate local economic growth. The cooperative form of business should be an obvious choice. Cooperatives have the potential to foster economic growth at the community and regional level, building on the spirit of cooperation that is already prevalent in rural areas. Over 160 years now cooperatives have been an effective way for people to exert control over their economic livelihoods as they play an increasingly important role in facilitating job creation, economic growth and social development. Cooperatives occupy an important position in the Indian financial system. Cooperatives were the first formal institution to be conceived and developed to purvey credit to rural India. Thus far, cooperatives have been a key instrument of financial inclusion in reaching out to the last mile in rural areas. The urban counterparts of rural cooperatives, the Urban Cooperative Banks (UCBs), too have traditionally been an important channel of financial inclusion for the middle and low income sections in the semiurban and urban areas. Cooperatives are community-based, rooted in democracy, flexible, and have participatory involvement, which makes them well suited for economic development (Gertler, 2001). The process of developing and sustaining a cooperative involves the processes of developing and promoting community spirit, identity and social organisation as cooperatives play an increasingly important role worldwide in poverty reduction, facilitating job creation, economic growth and social development (Gibson, 2005).