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Cooperative Bank India Essay

3588 words - 14 pages

CHAPTER 1.0INTRODUCTIONWHAT ARE BANKS?What is BANKING REGULATION ACT 1949 has to say about BANKS?The accepting, for the purpose of lending or investment of deposits of money from the public , repayable on demand or otherwise and withdrawal by cheque , draft , order or otherwise.
In simple words banking relates to :-

Accepting of deposit of money from public

For the purpose of lending that is making loans

Making investments

Besides these banks have got 3 unique features :-The deposits are repayable on demand.Other than bank nobody or any organisation can not use word bank behind their name.Only banks can issue cheque book.
Who is responsible for the regulation of banks?
Banking regulation act 1949 authorises RESERVE BANK OF INDIA to regulate and control banks in INDIA. Even foreign banks also need to comply with the directions issued by the RBI.

CLASSIFICATION OF BANKS
RBI ACT

OWNERSHIP

CONSTITUTION

ACTIVITY

SCHEDULED BANK

PUBLIC SECTOR BANK

STATUTORY BANK

COMMERCIAL BANK

NON SCHEDULED BANK

PRIVATE BANKS :-
INDIAN BANKS
FOREIGN BANKS

NATIONALISED BANKS

DEVELOPMENT BANK

-

COOPERATIVE BANKS

REGIONAL RURAL BANK

-

Table1.1source:- gyanam publication "financial glossary"WHAT ARE COOPERATIVE BANKS?Co-operative banks play an important role in meeting the credit requirements of both the urban and rural India. Though in the bank dominated financial system, these institutions account for a small share in the total credit they hold a significant position in credit delivery as they cater to different geographic locations and demographic categories1. The wide network of co-operative banks, both rural and urban, supplements the commercial banking network for deepening financial intermediation by bringing a large number of depositors/borrowers under the formal banking network. Demographically, these institutions have enabled access to financial services to low and middle-income groups in both rural and urban areas.The role of co-operative banks has been commendable in enhancing the inclusiveness of the financial system. However, the financial performance of these institutions particularly rural co-operatives has been sub-par partly owing to operational and governance-related issues. A number of committees have examined the reasons for their poor financial performance and have suggested remedial measures from time to time. Initiatives for revitalising co-operatives have been ongoing.STRUCTURE OF COOPERATIVE IN INDIAFig1.1Source:-rbi journalRURAL CO-OPERATIVESRural Cooperative Banks were the first formal institutions established to provide credit to rural India. Rural cooperatives have been a key instrument of Financial Inclusion reaching out to the last mile.Framework of Rural Cooperative Banks:In India Cooperative banks are registered under the respective State Co-operative Societies Act or Multi State Cooperative Societies Act, 2002 and governed by the provisions of the respective acts. Rural cooperatives structure in...

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