Co-operative Banks || Difference between Commercial & Co-operative Banks

Meaning of Commercial Banks

As I described in my previous article, commercial banks are regulated under the Banking Regulations Act, 1949. For detailed answer refer my article on commercial bank.

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Meaning of Co-operative Banks

Co-operate banks in India are registered under the Co-operative Societies Act, 1965. The Co-operative banks are also regulated by the Reserve Bank of India (RBI) and governed by the Banking Regulations Act, 1949.

Co-operative Banks are owned and controlled by the members, who also elect a Board of Directors for it, on the basis of principle of One Member = One Vote.

Co-operative banks only serve to its members. Thus, members of these kind of bank are both owner as well as its customers.

Some of the co-operative banks in India are:-

1. Saraswat Bank
2. Cosmos Bank
3. SVC Bank
4. Punjab and Maharashtra Cooperative Bank
5. Abhyudaya Cooperative Bank
6. TJSB Sahakari Bank
7. Bharat Cooperative Bank
8. Janata Sahakari Bank
9. NKGSB Cooperative Bank
10. Apna Sahakari Bank Ltd

Types:-

Co-operative Banks are of two types;

Ø Urban Co-operative Banks

Ø Rural Co-operative Banks

Urban Co-operative Banks mainly finance those people for self-employment, small scale industries, household finance, etc while Rural Co-operative Banks mainly finance agricultural based activities.

Difference between Commercial Banks and Co-operative Banks:-

Basis	Commercial Banks	Co-operative Banks
Meaning	These are profit making institutions.	Their main aim is to serve to its members and not to make profit.
Governing Act	Banking Regulations Act, 1949	Co-operative Societies Act, 1965
Area of operations	Large	Small
Motive of operations	Profit	Service
Borrowers	Account holders	Members
Main Function	Accepting deposit from public and granting loans to individuals, businessmen, etc	Accepting deposits from members and public and granting loans to farmers and small businessmen.
Banking Services	Offers many services like DD, CC, term loans. etc	Offers comparatively less variety services.
Interest Rate on deposits	Less	Slightly higher

Disclaimer: 

The contents of this article are solely for informational purpose. It does not constitute any professional advice. The author does not represent that the contents of the article are accurate or complete. Neither the Site/Blog 'Your Instasolv' and the author accepts any liabilities for any loss or damage of any kind arising out of any information in this article nor for any actions taken in reliance thereon.