What are Cooperative Banks?
Cooperative Banks, also known as Co-operative Credit Institutions or simply Co-ops, are financial institutions that are owned and operated by their customers, who are also referred to as members. These banks are established based on the principles of cooperation, mutual assistance, and democratic decision-making. The primary objective of cooperative banks is to meet the banking and financial needs of their members while promoting their economic and social well-being.
Some of the key characteristics and features of cooperative banks include:
- Ownership and Governance
- Focus on Members
- Member Deposits
- Member Loans and Credit
- Social Objectives
- Profit Distribution
- Local Focus
- Regulatory Framework
Cooperative Banks are an essential part of the cooperative movement and contribute to inclusive economic development, empowering individuals and communities through access to financial services and cooperative principles.
Difference between Commercial and Cooperative Banks
Commercial Banks and Cooperative banks are two types of financial institutions that offer a range of financial services to their customers. Commercial Banks works for profit motive whereas Cooperative banks are established based on the principles of cooperation.