co-operative bank

CO-OPERATIVE BANK

GROUP 5

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INTRODUCTION TO CO-OPERATIVE BANK

• Cooperative banking institutions takes DEPOSITS and LEND MONEY in most parts of the world.

• It differs from STOCKHOLDERS BANK.• Follows all PRUDENTIAL banking regulation.• It provides FINANCIAL ASSISTANCES to the

people with small means to protect them from the debt trap of the money lenders.

• It’s a financial entity which belongs to its members, who are at the same time the OWNERS and the MEMEBERS of the bank.

• Its often created by person belonging to the same local or personal community or sharing a common interest.

• Wide range of banking and financial services ( loans, deposits, and banking accounts etc…)

DEFINATION..• A co-operative bank is a financial entity

which belongs to its members, who areat 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 or sharing a common interest. Co-operative banks generally provide their members with a wide range of banking and financial services (loans, deposits, banking accounts)

FUNCTIONS OF CO-OPERATIVE BANK

• Co-operative Banks are organised and managed on the principal of co-operation, self-help, and mutual help. They work on the basis of “no profit no loss”. Profit maximization is not their goal.

• Co-operative bank do banking business mainly in the agriculture and rural sector. However, UCBs, SCBs, and CCBs operate in semi urban, urban, and metropolitan areas also.

Finance Function:1. Cooperative banks in India finance rural areas under: Farming Cattle Milk Personal finance2. Cooperative banks in India finance urban areas

under:Self-employment IndustriesSmall scale units Home financeConsumer financePersonal finance

Advantages and disadvantages

aim management Area network Interest rate Services Trading limits

/financing limits

STRUCTURE OF INDIA’S CO-OPERATIVE BANK

• The State Co-operative Banks (SCBs), Central Co-operative Banks (CCBs) and Urban Co-operative Banks(UCBs) can normally extend housing loans up to Rs 1lakh to an individual. The scheduled UCBs, however, can lend up to Rs 3 lakh for housing purposes. The UCB scan provide advances against shares and debentures.

• To support the financial requirement of people

• Co-operative banks are categorized at various dimensions and at various levels

• Co-operative banking structure consists of two main segment:-

(a)Agricultural Credit(b)Non-Agricultural Credit

Agricultural Sector

(Rural areas)Short and medium term credit

PACS(BASE LEVEL)

CCB(DISTRICT LEVEL)

SCB(APEX LEVEL)

Long term credit

LDB

PLDB

Non-Agricultural Sector(Urban and Semi-Urban Areas)

Urban Co-operative Banks

Co-operative banks in India finance….

Rural Areas Urban Areas--Farming -- Small Scale Units--Cattle --Industries--Milk --Home finance--Hatchery --Self Employment --Personal finance --Personal finance

PRODUCTS AND SERVICES• DEPOSITS . SERVICESi.Saving Bank Account i. Clearingii.Current Account ii. Safe Deposit Lockeriii.Recurring Deposits iii. ATMiv.Fixed Deposits iv. Demand Draft/Pay Orderv.Cash Certificate•LOANSi.Loans to Salaried employeesii.Home Needs Loaniii.Loan to Pensionersiv.Education $ Housing Loan

Co-operative principles

Voluntary and open membership Democratic member control Member economic participation Autonomy and independence Education, training and information Co-operation among Co-operatives Concern for Community

Customer-owned entities In a co-operative bank, the needs of the customers meet

the needs of the owners, as co-operative bank members are both.

• Democratic member control Co-operative banks follow the principle of “one person, one vote.• profit allocation Profit is usually allocated to members which is related to the

number of shares subscribed by each member.• limited banking Co-operative Banks provide limited banking products and are

functionally specialists in agriculture related products.