The need for reform of Cooperative Banks

The need for reform of Cooperative Banks
The need for reform of Cooperative Banks


Cooperative banks are those banks which provide financial support to agriculturist, rural industries and to trade and industries of urban areas (up to a limited extent). The cooperative banks are registered under Cooperative Societies Act, 1965. The most interesting thing in these banks are that they give slightly higher interest rate than the commercial banks. Recently, the Reserve Bank of India (RBI) imposed restrictions on withdrawals from Punjab and Maharashtra Cooperative (PMC) Bank, which triggered a panic among bank customers. It has brought to the fore the issue of health of the banking sector, especially co-operative banks and the need to restore confidence among customers. PMC Bank is one of the top five urban cooperative banks in the country has painted a scary picture among the depositors. Their money are being put to risk by concentrating more on undisclosed bad loans and lending. RBI has been urging cooperative lenders to act professionally. We need confidence-building for all banks, not just for cooperatives, but even NBFCs.. This topic is included in Indian Economy of GS paper III.

  1. Co-operative banks: Is dual regulation the problem?
  2. Trust deficit: On Punjab and Maharashtra Co-operative Bank issue
  3. ‘Cooperative banks must be professionally managed’
  4. PMC Bank crisis: Should depositors worry about cooperative banks?
  5. All you wanted to know about… Urban Co-operative banks
  6. Who pays?
  7. Explained: Why RBI has put restrictions on PMC bank, what happens now
  8. Banking system, including cooperatives safe and sound: Shaktikanta Das on PMC
  9. Regulate cooperative banks like other banks
  10. The Co-op crisis: How 1,500-odd urban cooperative banks are being run and regulated

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