Co-operative Bank Scams in India
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ICMR HOME | Case Studies Collection
Case Details:
Case Code : FINC021
Case Length : 9 Pages
Period : 2001 - 2002
Pub. Date : 2002
Teaching Note : Available
Organization : Madhavapura Mercantile Cooperative Bank (MMCB), Cooperative Urban Bank (KCUB)
Industry : Financial Services
Countries : India
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FINC021) click on the button below, and select the case from the list of available cases:
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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<< Previous
Cooperative Banks - A Profile
In the early 20th century, the availability of credit in India, more particularly in rural areas was non existent. There was no organized institutional credit for agricultural and related activities.
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People in the rural areas largely depended on money lenders who lent money at very high rates of interest. Thus, there was need to create an institution which would cater to the needs of ordinary people and was based on the principles of cooperative organisation and management. In 1904, the first legislation on co-operatives was passed. In 1914, the Maclagen committee suggested a three tier structure for cooperative banking i.e Primary Agricultural Credit Societies at the grass root level, Central Cooperative Banks at the district level and State Cooperative Banks at the State or apex level. Cooperative banks were expected to serve as substitutes for money lenders, and provide both short-term and long-term institutional credit at reasonable rates of interest.
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Cooperative banks operate both in urban and non-urban centers (Refer Table I for characteristics of Cooperative banks).
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The urban areas are served by the Primary (Urban) Cooperative Banks (PCBs/UCBs) whereas the rural areas are largely served by two sets of institutions, the PACSs and LDBs, dispensing short-term and long-term credit, respectively. UCBs have a three-tier structure with the State Cooperative Banks (SCBs) at the apex level, the District Central Cooperative Banks (CCBs) at the intermediate level and the Primary Agricultural Credit Societies (PACS) at the grass root level (Refer Table II). Under the long-term credit structure, State Cooperative Agriculture and Rural Development Banks (SCARDBs) are at the apex level and the Primary Cooperative Agriculture and Rural Development Banks (PCARDBs) are at the base level... |
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