Theme: Co-operative Banking

By

Prof. Shivasharana Prof. Jayalakshmi.

N. A.
MCA, MBA, M.Phil, (PhD) MBA, M.Phil, (PhD)
Research Scholar, Research Scholar,
Rayalaseema University, Kurnool, A.P Rayalaseema University,
Kurnool, A.P
Head and Professor, Dept. of Management Studies, Faculty Dept. of
Management Studies
M.S. Engineering College, M.S. Engineering College,
Bangalore – 562 110 Bangalore – 562 110
Mobile – 09845409437 Mobile – 09742876086

Abstract

Co-operation was introduced in Indian in the early years of the 20th Century essentially as a
means of helping the poorer section of agriculturalists to improve their economic conditions and
lift them out of a state of starvation. The first legislation on co-operation was passed in 1904 and
it was contemplated to form credit co-operatives. Now co-operative credit in India have
expanded in all the direction , the primary force behind the introduction of co-operative
movement in India was to meet the financial requirement of the farmers in respect of their
agricultural operation at lower rates of interest but in present time. Co-operative movement has
taken the institutional responsibility of promoting economic order in our country. Urban co-
operative banks hold a very significant position in the Indian banking sector. The Urban co-
operative have contributed significantly to the well being of lower income groups of the urban
and semi urban populace. They are governed by banking regulation act and the respective state
co-operative societies Acts.

The Co operative banks in India started functioning almost 100 years ago. The Cooperative
bank is an important constituent of the Indian Financial System, judging by the role assigned to
co operative, the expectations the co operative is supposed to fulfill, their number, and the
number of offices the cooperative bank operate. Though the co operative movement originated in
the West, but the importance of such banks have assumed in India is rarely paralleled anywhere
else in the world. The cooperative banks in India play an important role even today in rural
financing. The businesses of cooperative bank in the urban areas also have increased
phenomenally in recent years due to the sharp increase in the number of primary co-operative
banks.

Co operative Banks in India are registered under the Co-operative Societies Act. The cooperative
bank is also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and
Banking Laws (Co-operative Societies) Act, 1965.

While the co-operative banks in rural areas mainly finance agricultural based activities including
farming, cattle, milk, hatchery, personal finance etc. along with some small scale industries and
self-employment driven activities, the co-operative banks in urban areas mainly finance various
categories of people for self-employment, industries, small scale units, home finance, consumer
finance, personal finance, etc.