Banking in India – Part 3
Types of Banks
- Cooperative banks are maintained by the stake and shareholders who are also the top clients.
- These are also be divided into urban and rural banks.
- These banks are regulated by the States under Cooperative Societies Act, and the Reserve bank of India under the laws including Banking Laws (Cooperative Societies) Act, 1955, and the Banking Regulations Act, 1949.
- Anyonya Co-operative Bank Limited (ACBL) headquartered in Vadodara,Gujarat is the first co-operative bank in India.
Types of Co-operative Banks
- Three types of cooperative banks are operating within India.
- They are primary credit societies, central co-operative banks, and state co-operative banks.
- These banks are further organized into three levels, village or town level, district level, and state level.
Primary Credit Societies:
- These are formed at the village or town level with both the borrower and non-borrower members being the residents of one single locality.
- The operations of each of such societies are restricted to a small area for the members to get to know each other and hence are able to watch over the activities each other in order to prevent fraud.
Central Co-operative Banks:
- These banks operate at the district level and have some of the primary credit societies which belong to the same district as their members.
- These banks provide loans to their members including the primary credit societies and also acts as a link between the primary credit societies and the state cooperative banks.
State Co-operative Banks:
- These are the highest level or apex level cooperative banks in all the states of the country.
- They are responsible for the mobilization of funds and also help in its proper channelization among various sectors.
- The money are distributed to the individual borrowers from the state cooperative banks through the central cooperative banks and the primary credit societies.
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