Cooperative banks follow the concept of no profit no loss!!!
Cooperative banks follow the concept of no profit no loss!!!
Such cooperative banks are run on the concept of no profit no loss. That is, the aim of these banks is not to earn, they just keep in mind that so much money should come in that the expenses of operation or employees can be covered.
How did it start andwhy was this bank needed?
There is a decades old story behind the beginning of this bank. In fact, decades ago, rural people of india used to depend on landlords or moneylenders to meet their financial needs. On the other hand, these landlords used to lend to the needy on their own terms. That is, it was the landlord who decided what percentage of interest he would charge on the loan and what mortgage he would give in exchange for the money. Many times the interest rate was so high that people would lose their houses and land due to not being able to pay it. This problem became the reason for the birth of a new organization.
In fact, gradually people started understanding that the landlords were doing whatever they wanted in the name of repaying the loan. So to find a solution to this problem, the people of the village started collecting money among themselves. He would deposit this money in a committee whose members were also people from the same village, and when needed, he would take a loan from the money deposited in the committee at a very low interest rate. If a person made a deposit in these committees, he also got good interest. Later, these societies came to be called cooperative banks.
With the opening of these co-operative banks, people not only got relief from the interest of the landlords, but also the villagers started getting another benefit they were freed from having to go to banks in cities to apply or speak and understand English.