IFS02 CO-OPERAT

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CO-OPERATIVE BANKS V/S COMMERICAL BANKS OBJECTIVES AND FUNCTIONS Submitted by: Group-2 Abhishek Tiwari Anish Pandey Ankit Surana Anubhav Srivastava Co-Operative Bank  Co-operative Banks are organized and managed on the principal of co- operation, self-help, and mutual help.  Function with rule of “one member, one vote” and “no loss, no profit” basis.  Co-operative Banks , as a principle, do not pursue the goal of profit maximisation. Dominant Feature of Co-Operative Bank Maximizing prof
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  CO-OPERATIVE BANKS V/S COMMERICAL BANKSOBJECTIVES AND FUNCTIONSSubmitted by: Group-2Abhishek TiwariAnish PandeyAnkit SuranaAnubhav Srivastava  Co-Operative Bank  Co-operative Banks are organized and managed on the principal of co-operation, self-help, and mutual help.  Function with rule of “one member, one vote” and “no loss, no profit” basis.  Co-operative Banks , as a principle, do not pursue the goal of profitmaximisation. Dominant Feature of Co-Operative Bank  Maximizing profits and the rate of return on capital are not the dominantbusiness objectives of cooperative banks.  Cooperative banks are essentially owned by their members & ownership is atthe local or regional level.  Cooperative banks are often part of a national network with an integratedStructure.  Cooperative banks have a close proximity to their members and customers.  Rare for a cooperative bank to be listed on a stock exchange although somecooperative banks have subsidiaries which are listed.  Ownership stakes in cooperative banks are not tradable in an open market  Generally, profits are retained within the bank with only limited distributionsbeing made.  Distinguish Between Commercial Bank and Co-operative Bank   Parameters Commercial Banks Co–Operative Banks 1.RegistrationCommercial Banks are requiredto be registered under BankingRegulation Act, 1949Co-operative Banks arerequired to be registered under the Co-operative Societies Act,of the concerned state.2. Main ObjectiveCommercial Bank is to acceptdeposits from public for thepurpose of lending to industryand commerceCo-operative Bank is to acceptdeposits from the members andthe public for the purpose of providing loans to farmers andsmall businessmen with a mottoof service3. Availability of Funds Massive funds are available atthe disposal of CommercialBanks.Limited funds are available atthe disposal of Co-operativeBanks4. Area of OperationCommercial banks operate over a larger area. Some commercialbanks even have branches inforeign countriesThe area of operations of Co-operative Banks is limited andmostly confined to State. Theydo not operate at national levelnor international level  Parameters Commercial Banks Co–Operative Banks 5. NationalizationAt present 20 CommercialBanks have been nationalizedin IndiaIn India Co-operative Banks arenot nationalized.6. Merchant Banking ServicesCommercial Banks providemerchant banking servicessuch as advising the companiesregarding the public issue of shares.Co-operative Banks do notprovide merchant bankingservices.7. Mutual FundsCommercial Banks in Indiasuch as Canara Bank, Bank of India, State Bank of India, dooperate mutual funds. At present co-operative banksin India do not operate mutualfunds.8. Basis of operation Commercial banks operates onthe commercial principles. Theyoperate to earn a profit.The basis of operations is co-operative lines, i.e. service to itsmembers and the society.9. Rate of InterestThe Commercial Banks providea lesser rate of interest ascompared to co-operativebanks.The Co-operative Banksprovide a little higher rate of interest on deposits ascompared to commercial banks
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