What is a cooperative bank and how does it work?

S Venkateshwari

How does a cooperative bank operate, and what is it?


In the month of March 2024, Cooperative minister Amit Shah said in a statement that in the coming time, an urban cooperative bank will be established in every city. Not only this, he also said that urban cooperative banks should make themselves advance in providing ATMs, credit/debit card issuance, clearing systems and maintaining SLR (Statutory Liquidity Ratio) limits. In such a situation, let us understand in detail in this report what is this cooperative bank, how different is it from ordinary banks and why was it needed.

What is Urban Cooperative Bank? 

Cooperative bank, also known as Urban Cooperative bank, is made up of two words, Saha and Kari, which means working together. It is a low-cost financial institution where that is owned by those who are both its members and customers.

In a big and developing country like India, thedevelopment of rural areas is very important for social development. Because most of the population of this country lives in rural areas only. This is why urban cooperative banks are operated in urban and semi-urban areas of India. This bank is registered under the Co-operative Societies Act. This bank helps people who have difficulty accessing the services of the mainstream banking segment. Urban co-operative banks help serve the banking needs of small businesses, individuals and communities. The services of this bank include deposit accounts, loans, remittances and other financial products and services.

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