How many Urban Co-operative Banks are There in India

Introduction

There are presently 1539 Urban Co-operative Banks in India. A cooperative bank is a small-sized, financial institution where its members are the owners and customers of the bank. They offer lending facilities to small businesses in both urban and non-urban areas. Mostly they are regulated by the RBI (Reserve Bank of India) and are registered under the States Cooperative Societies Act. Cooperative Banks have proved to be an asset in terms of acting as financial intermediate bodies to agricultural and allied activities, small-scale industries and self-employed workers.

Co-operative Banks in India

As per the Banking Regulation Act 1949 and Banking Laws Act 1955, the Co-operative Banks are governed as such. The main motive of these banks is mutual help and don't seek profitable ventures.

Features of Co-operative Banking in India:

• From the cooperative banks with the help of minimum interest rates, the farmers can avail of agricultural loans

• They help in providing easy and accessible loans and credit benefits with scarce banking facilities in rural areas.

• A part of the annual profit earned is distributed among the cooperative members as per the prescribed limitations and the annual profit earned is spent on financial reserves and resources.

History of Co-operative Banks in India

When India was in a time of distress during the 20th century, cooperative banks were introduced.

• The first step taken for the cooperative society was the Cooperative Credit Societies Act, of 1904 which got accelerated with the introduction of the Cooperative Societies Act of 1912.

• After the independence of India, the RBI set up a Central Committee for Cooperative Training in 1953 for establishing cooperative training centres.

• Rural Credit Survey Committee was set up in 1954 to solve the issue of the financial crisis in rural areas

• The cooperative banks started extending their reach to the public in both rural and urban areas

Advantages of Co-operative Banks in India

Co-operative Banks play an important role in the development of the economy and act as a boon to the various sectors of society.

Here are some of the advantages of the Co-operative Banks of India:

• These banks provide aid to the rural population by getting loans and credits with interest rates, lower in comparison to the local money lenders

• To reduce the risk of loss, these banks aim at promoting productive burrowing

• They manage to maintain a personal rapport with the customers and have their reach at every length and breadth of the country

• These banks have helped the farmers by providing them with agricultural credits for buying basic products like fertilizers, seeds, etc.

Disadvantages of Co-operative Banks in India

The following are a few disadvantages of Co-operative Banks in India:

• To lend money, the banks need investors which are difficult to find

• Due to the lack of investors and money, few banks are not able to deliver the credits and money to the rural people

• The cooperative banks are facing the risk of losing their customers with the new types of banks opening-up

• All the cooperative banks in the country are not equally developed. Some states have more beneficial and functioning units, while some types have less functioning units

Conclusion

The Urban Co-operative Banks play an important role in mobilising deposits and financing the small-borrower sector, which includes small-scale industries. Thus cooperative banks are instrumental in providing financial assistance to the rural sector.