Abstract

Cooperative banks are subject to the Reserve Bank's statutory powers of regulation and supervision under the 1949 Banking Regulation Act. However, the Registrars of Cooperative Societies of the States concerned retain their authority over these banks' incorporation, management, etc., incorporation, management, etc., of these banks. It is further stated that the provisions of the Banking Regulation Act, 1949 (as applicable to Cooperative Societies) shall be supplementary to, and not, save as expressly specified in the Act, in derogation of, any other law for the time being in force. This means that cooperative banks must follow not just the Banking Regulation Act, but also any additional legislation that may be relevant to them. The requirements of the Banking Regulation Act must take precedence over the provisions of the Cooperative Societies Act concerning matters specifically established in the Banking Regulation Act. By including Section 56 of the Act, cooperative banks were rendered subject to it in 1966. As the name implies, members of a cooperative bank serve as both the bank's owners and its customers. Members of the same local community, or profession, or who share a shared interest will typically form a cooperative bank. In general, members of cooperative banks have access to a wide variety of banking and financial services (loans, deposits, checking accounts, etc.). The structure, mission, values, and management of cooperative banks are distinct from those of stockholder banks. They are treated similarly to stockholder banks in most countries because of their oversight and control by banking regulators and compliance with prudential banking standards. This regulation and oversight may be exercised directly by government agencies in certain nations, while in others it may be entrusted to a federation or centralized body of cooperatives. The term "cooperative banking" refers to the cooperative structure of both retail and commercial banking. Most of the world's population has access to cooperative banking institutions that accept deposits and make loans. Commercial banking services supplied by manual organizations (such as cooperative federations) to cooperative firms are included in the broader category of "cooperative banking," which also include retail banking as practiced by credit unions, common savings and loan associations, building societies, and cooperatives. Comparatively, cooperative banks have a three-tiered federal structure, while commercial banks use a branch banking model.

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