Bhavya Arya & Nasima Abidi, IV Year, Gujarat National Law University
INTRODUCTION TO COOPERATIVE BANKS
Cooperative banks are an important financial institution and play a pivotal role in the Indian scenario.1 They are owned by its associates, who are both owners and consumers of their banks. It is generally joined by individuals who belong to the same locality who has a common interest and it offers their people with a broad variety of services such as loans, deposits, ATM facility and current accounts.
Cooperatives are widely classified into Urban and Rural Co-operative banks on the basis of their region of operation.
Urban Cooperative Banks: Though it is not formally defined but it refers to primary cooperative banks which were based in Urban and Semi Urban areas. As per the definition of the RBI these are small sized banks which operate in semi -urban, urban and metropolitan centres and provide services to small borrowers like small industries, retail traders etc. Till 1966, they were exclusively under the purview of the State Government. In 1966, certain provisions of the Banking Regulation Act were made applicable to these banks. Subsequently, the RBI got some regulatory authority over these banks.
