Co-operative Banks In India: Heading Towards Reform

Introduction

Co-operative banks in India form the backbone for delivery of credit to rural areas. They belong to their members, so the customers are also owners. Access to credit in rural areas was the key reason behind the advent of the co-operative movement in India which offers short term credit and long term credit structures. Short term credit institutions follow a 3 tier structure, with primary agricultural credit societies ("PACS") at the village level, district central cooperative banks ("DCCBs") at intermediary district level and state cooperative banks ("SCBs") at State level. Long term cooperative credit institutions operate through 2 tiers, one at the State level known as state cooperative agriculture and rural development banks ("SCARDBs") and at the sub-district level as primary cooperative agriculture and rural development banks ("PCARDBs"). In addition, there are the urban cooperative banks ("UCBs") operating in urban and semi-urban areas.