co-operative banks svims
TRANSCRIPT
-
7/29/2019 Co-Operative Banks Svims
1/30
Co-Operative banks
-
7/29/2019 Co-Operative Banks Svims
2/30
Definition
A co-operative bank is a financial entity which belongsto its members, who are at the same time the ownersand the customers of their bank.
Co-operative banks are often created by persons
belonging to the same local or professional communityor sharing a common interest.
Cooperative banks generally provide their memberswith a wide range of banking and financial services(loans, deposits, banking accounts).
In India co-operative banks are regulated with the RBIand governed by Banking Regulations Act 1949 and Co-operative Societies Act, 1965
-
7/29/2019 Co-Operative Banks Svims
3/30
History
The Bank was formed in 1872 in the city Manchester in UK.The Co-operative banks in INDIA have a history of almost100 years. The Co-operative banks are an importantconstituent of the Indian Financial System. Co operativeBanks in India are registered under the Co-operativeSocieties Act. The cooperative bank is also regulated by theRBI. They are governed by the Banking Regulations Act1949 and Banking Laws(Co-operative Societies) Act, 1965.
These banks were conceived as substitutes formoneylenders.
-
7/29/2019 Co-Operative Banks Svims
4/30
Establishments
Co-operative bank performs all the main banking functionsof deposit mobilization, supply of credit and provision ofremittance facilities.
Co-operative Banks provide limited bankingproducts and are functionally specialists in agriculturerelated products. However, co-operative banks now providehousing loans also.
UCBs provide working capital loans and term loan as well.
-
7/29/2019 Co-Operative Banks Svims
5/30
Features
Customer-owned entities
In a co-operative bank, the needs of the customersmeet the needs of the owners, as co-operative bankmembers are both owners and customers.
Democratic member control
Co-operative banks follow the principle of one person,one vote.
Profit allocationProfit is usually allocated to members which is relatedto the number of shares subscribed by each member.
-
7/29/2019 Co-Operative Banks Svims
6/30
Functions
Co-operative Banks are organized and managed on the principal ofco-operation, self-help, and mutual help.
They work on the basis ofno profit no loss. Profit maximization isnot their goal
Co-operative bank do banking business mainly in the agricultureand rural sector. However, UCBs, SCBs, and CCBs operate in semiurban, urban, and metropolitan areas also.
The State Co-operative Banks (SCBs), Central Co-operative Banks(CCBs) and Urban Co-operative Banks(UCBs) can normally extendhousing loans up to Rs 1lakh to an individual. The scheduled UCBs,however, can lend up to Rs 3 lakh for housing purposes. The UCBscan provide advances against shares and debenture
-
7/29/2019 Co-Operative Banks Svims
7/30
Finance Function:
1. Cooperative banks in India finance rural areas under:
Farming
Cattle
Milk
Personal finance
2. Cooperative banks in India finance urban areas under:
Self-employment
Industries Small scale units
Home finance
Consumer finance
Personal finance
-
7/29/2019 Co-Operative Banks Svims
8/30
1. The Andaman and Nicobar State Co-operative Bank Ltd.
2.The Andhra Pradesh State Co-operative Bank Ltd.
3. The Arunachal Pradesh State co-operative Apex Bank Ltd.4. The Assam Co-operative Apex Bank Ltd.
5. The Bihar State Co-operative Bank Ltd.
6. The Chandigarh State Co-operative Bank Ltd.
7. The Delhi State Co-operative Bank Ltd.
.
8. The Goa State Co-operative Bank Ltd.
9. The Gujarat State Co-operative Bank Ltd.
10. The Haryana State Co-operative Apex Bank Ltd.
11. The Himachal Pradesh State Co-operative Bank Ltd.
-
7/29/2019 Co-Operative Banks Svims
9/30
12. The Jammu and Kashmir State Co-operative Bank Ltd.
13. The Karnataka State Co-operative Apex Bank Ltd..
14. The Kerala State Co-operative Bank Ltd.
15. The Madhya Pradesh Rajya Sahakari Bank
16. The Maharashtra State Co-operative Bank Ltd.
17. The Manipur State Co-operative Bank Ltd.
18. The Meghalaya Co-operative Apex Bank Ltd.
19. The Mizoram Co-operative Apex Bank Ltd.
20. The Nagaland State Co-operative Bank Ltd.
21. The Orissa State Co-operative Bank Ltd.
22. The Pondichery State Co-opertive Bank Ltd.
23. The Punjab State Co-operative Bank Ltd.
-
7/29/2019 Co-Operative Banks Svims
10/30
23. The Rajasthan State Co-operative Bank Ltd..
24. The Sikkim State Co-operative Bank Ltd.
25. The Tamil Nadu State Apex Co-operative Bank Ltd.
26. The Tripura State Co-operative Bank Ltd.
27. The Uttar Pradesh Co-operative Bank Ltd..
28 The West Bengal State Co-operative Bank Ltd.
29 The Chhattisgarh RajyaSahakari Bank Maryadit
30. The Uttaranchal Rajya Sahakari Bank Ltd.
-
7/29/2019 Co-Operative Banks Svims
11/30
Structure of Co-operative Banking
Structure of Co-operative Banking
Urban Co-operative Banks Rural Co-operative
Credit Banks
-
7/29/2019 Co-Operative Banks Svims
12/30
Rural Co-operative Credit Banks
Short term Credit
Co- Operative banksLong term credit
Co- operative banks
-
7/29/2019 Co-Operative Banks Svims
13/30
Short term Credit Co- Operative banks
Short term credit is supplied by three set of
institutions
1. Primary agricultural credit society (PACS)
2. District central co-operative banks (DCCB)
3. State co- operative banks (SCB)
-
7/29/2019 Co-Operative Banks Svims
14/30
Long term credit Co- operative banks
Long term credit is provided by 2 set of
institutions
1. Primary Co- operative agriculture and rural
development banks (PCARDB)
2. State Co- operative agriculture and rural
development banks
-
7/29/2019 Co-Operative Banks Svims
15/30
Primary Agricultural Credit Societies (PACS)
PACS provide short and medium term credit to their members for
productive purposes The PACSs function at the base of the co-operative credit system.
It may be organized by ten or more persons normally belongingto a village or a cluster of villages
The societies raise funds by way of share capital, deposits frommembers and non-members and loans from DCCBs.
The membership fee and share capital of PACS is nominal so thateconomically weakest sections of the society can becomemember
PACS acts as the link between the rural borrowers on the oneside and the higher agencies on the other viz. District co-operative Bank, State co-operative bank, Government and theNABARD
The borrowing powers of members as well as society is limited.
-
7/29/2019 Co-Operative Banks Svims
16/30
Functions of PACS
Accepting deposits from members and non-members
To provide short term and medium term loan at right
time concentrating on small and marginal farmers To distribute agricultural equipments, fertilizers, seeds,
insecticides and other inputs to farmers
To distribute food grains and other necessary goods
To provide storage facilities to farmers for theiragricultural produces
To provide non farm credit to its members
-
7/29/2019 Co-Operative Banks Svims
17/30
District Co- Operative Bank
Functions: To act as a balancing centre of finance for the primary
societies in the district by providing them funds when theyface shortage
To provide financial assistance to members at a low rate of
interest
To supervise and control the working of the primary societies
To attract local deposits for strengthening co operative activity
To advise and guide the primary societies
To develop and extent banking facilities in rural areas
To act as a connecting link between primary societies andApex bank
To provide facilities for the healthy growth of co- operative
movement
-
7/29/2019 Co-Operative Banks Svims
18/30
Sources of Fund
Share capital
Membership fees
Reserve funds
Accepting deposits from the public ,primarysocieties
Deposits of reserve fund of primary society
Loans from state co-operative banks,government, NABARD, State bank of India
Grants from Government
-
7/29/2019 Co-Operative Banks Svims
19/30
Lending by DCB
DCBs finance mainly to its own members andhave no choice in the investments of its funds
These banks have to invest major portion of theirresources in agricultural loans
The main function is to lend to primary creditsociety
They also lend directly to the public for nonagricultural purposes within the area of operation
-
7/29/2019 Co-Operative Banks Svims
20/30
State Co-operative banks (SCBs)
SCBs are the Apex institution in the three tier co-operative credit structure, operating at the state level
SCBs finance, control and coordinate the working ofthe credit co- operative banks
RBI finance agriculture through SCBs SCBs raises resources and channelizes them through
district cooperative banks for both agricultural and nonagricultural purposes
SCBs also channelizes the refinance provided byNABARD
In each state there will be state co-operative bank
-
7/29/2019 Co-Operative Banks Svims
21/30
Functions of SCBs
Providing financial assistance to the central co-operative banks and other Apex co-operativeinstitution in the state
Coordinating and controlling the activities of thecentral co-operative banks
Formulating and implementing of co-operative creditpolicies of the state
Acting as a link between co-operative credit institutionin the state with RBI and NABARD
Performing ordinary businesslike acceptance ofdeposits, lending money, collection of cheques etc.
-
7/29/2019 Co-Operative Banks Svims
22/30
Sources of fund
By issue of shares
Borrowing from state govt.,RBI,NABARD andSBI
Accepting deposits from the public
Reserves and surplus
-
7/29/2019 Co-Operative Banks Svims
23/30
Long term credit Co- operative banks
Long term credit Co- operative banks has 2 tier
systems two-tier structure with central land
development banks at the state level and
primary land development banks at talukalevel or district level.
State Land development banks
Primary land development banks
-
7/29/2019 Co-Operative Banks Svims
24/30
The banks of Tamil Nadu, Andhra Pradesh, Karnatakaare of this (two-tier) type.
In states like Gujarat, UP, and Jammu & Kashmir there
is unitary structure, i.e., the Apex Land Development
Banks operate directly through their own branches at the
district or taluka level.
The LDBs obtain funds mainly by the issue of long-term
debentures. Such debentures carry the guarantee of thestate government and are subscribed by the central and
state governments, commercial banks, life insurance
corporation and RBI.
-
7/29/2019 Co-Operative Banks Svims
25/30
Urban Co-operative Banks
History
The success of co-operative movement in Britain andGermany led to the set of UCBs in India
The enactment of Co-operative credit society act of 1904gave the real impetus to the movement.
The first Urban co-operative credit society was registered inKanjivaram (madras)
In 1915 Maclagam committee was appointed to review theirperformance and suggest measures to strengthen them.
After that many committees like Varde committee,Madhavascommittee The Hate committee were formed from time totime for strengthening the UCBs
-
7/29/2019 Co-Operative Banks Svims
26/30
Functions
Urban co-operative banks provide banking andcredit facilities to urban and semi urbanpopulation.
The term Urban Co-operative Banks (UCBs),refers to primary cooperative banks located inurban and semi-urban areas.
These banks, till 1996, were allowed to lendmoney only for non-agricultural purposes..
They lent to small borrowers and businesses.
Today, their scope of operations has widened.
-
7/29/2019 Co-Operative Banks Svims
27/30
Duality of control
Primary urban co-operative banks are under
the dual control of Co-operative societies and
RBI
-
7/29/2019 Co-Operative Banks Svims
28/30
Role of RBI in Urban co-operative
banks
RBI regulates and supervises the activities of
Urban co-operative Banks. There is separate
department in RBI viz. Urban banks
department It perform 3 main functions
1. Regulatory functions
2. Supervisory functions
3. Developmental functions
-
7/29/2019 Co-Operative Banks Svims
29/30
Regulatory functions includes licensing of new
primary co-operative banks, existing banks ,
branch licensing
Supervisory functions relates to on site and off
site inspection of these banks by RBI.
Developmental functions include refinance
facilities by RBI. The refinance is given at the
Bank rate.
-
7/29/2019 Co-Operative Banks Svims
30/30
Facts
There are about 1700 UCBs with a total networkof 7,500 branches and these societies constituteabout 10% of the aggregate banking business
Some of them are authorised dealers of foreignexchange
About 79% of UCBs are located in 5 states,viz.AndhraPradesh,Gujrat,Karnataka,Maharashtra
and Tamilnadu and they account for nearly 82%ofthe total deposits and advances of the urbanbanking system