Co operative banking system - origin, scope, object

Cooperative banking in India, its origin, scope , object , types, hierarchy

1. CO-OPERATIVE BANKING SYSTEM : Scope object history By DIYA NANDI, student of LL.M , UNIVERSITY OF CALCUTTA

2. What are cooperative banks? VOLUNTARY ASSOCIATION OF MEMBERS FOR SELF HELP. Financial entity which belongs to its members, who are at the same time the owners and the customers of their bank .,often established by p eople belonging to the same local or professional community having a common interest. The co-operative structure is designed on the principles of cooperation, mutual help, democratic decision making and open membership. It follows the principle of ‘one shareholder, one vote’ and ‘no profit, no loss’. Cooperatives Banks are registered under the Cooperative Societies Act, 1912 . These are regulated by the Reserve Bank of India and National Bank for Agriculture and Rural Development (NABARD) under the Banking Regulation Act, 1949 and Banking Laws (Application to Cooperative Societies) Act, 1965 . Deposit Insurance and Credit Guarantee Scheme upto 1 lakh per deposit, fraction

3. C haracteristics of Cooperative Bank Customer-owned entities : The members of cooperative banks are both the owners and the customers of the bank. Thus, the aim of the cooperative bank is not to maximize profits but to provide the best possible services to its members . Some of the cooperative banks also admit non-members so as to provide them with banking services. Democratic member control : Cooperative banks members, democratically elect the board of directors. ;“one man one vote” is followed, irrespective of the number of shares held by a member, which ensures that no member enjoys any arbitrary power over other members. P rofit allocation : A specified p ortion of the profits are transferred to Statutory Reserve and other reserves, and then a f air rate of interest is paid on the capital subscribed by the members . A part of this profit can also be distributed to the co-operative members, with legal and statutory limitations in most cases. Inclusion of rural masses : It plays a significant role in the financial inclusion of unbanked rural masses.

4. Structure of Cooperative Banks in India co-operative banks in India are divided into two categories - urban and rural. Rural cooperative credit institutions could either be short-term or long-term in nature. Further, short-term cooperative credit institutions are further sub-divide A State Co-operative Bank works at the apex level (StCB i.e. works at the state level). The Central Co-operative Bank works at the Intermediate Level (CCB i.e. works at district level). Primary Co-operative Credit Societies at a base level (i.e. PCCS works at village level). Meanwhile, the long-term institutions are either State Co-operative Agriculture and Rural Development Banks (SCARDBs) at the apex level. Primary Co-operative Agriculture and Rural Development Banks (PCARDBs) at the district level or block level. On the other hand, Urban Co-operative Banks (UCBs) are either scheduled or non-scheduled. Scheduled and non-scheduled UCBs are again of two kinds- multi-state and those operating in single state.

5. COOP BANKING structure :2 PACS are outside the purview of the Banking Regulation Act, 1949 and hence not regulated by the Reserve Bank of India. StCBs/DCCBs are registered under the provisions of State Cooperative Societies Act of the State concerned and are regulated by the Reserve Bank. Powers have been delegated to National Bank for Agricultural and Rural Development (NABARD) u nder Sec 35 A of the Banking Regulation Act (As Applicable to Cooperative Societies) to conduct inspection of State and Central Cooperative Banks. Primary Cooperative Banks (PCBs), also referred to as Urban Cooperative Banks (UCBs), cater to the financial needs of customers in urban and semi-urban areas. UCBs are primarily registered as cooperative societies under the provisions of either the State Cooperative Societies Act of the State concerned or the Multi State Cooperative Societies Act, 2002 if the area of operation of the bank extends beyond the boundaries of one state. The sector is heterogeneous in character with uneven geographic spread of the banks. While many of them are unit banks without any branch network, some of them are large in size and operate in more than one state.

6. ACT & RULES APPLICABLE A Co-operative Society functions as per the provisions of 1. Co-operative Societies Act ; We have a number of Co-operative Societies Acts functional in different states like – Maharastra Co-operative Societies Act, 1960,– Pondicherry Co-operative Societies Act, 1972,– Karnataka Co-operative Societies Act, 1959,– Delhi Co-operative Societies Act, 1972,– Kerala Co-operative Societies Act etc. When the area of operation is restricted to one state, the State Co-operative Act & Rules, under which the society is registered will be applicable.In a particular state, if Co-operative Act and Rules is not enacted, the Central Act which is known as The Co-operative Societies Act, 1912 and its rules will be applicable. the area of operation of Society is spread in two or more states, The Multi-State Co-operative Societies Act, 2002 and its rules shall be applicable.

7. act,rules 2. Co-operative Societies Rules A set of rules is also framed under the respective State Co-operative Act for procedural aspects. 3. Bye-laws Each society also registered with the bye-laws for internal management of the societies duly approved by the registrar at the time of registration of the society. The bye-laws of a society constitute a contract between a member and the society and it provide for the management of the society. The bye-laws are framed within the provisions of the Act and the rules made there under. Bye-laws include the objects of the society and completely define and restrict the society’s activities, but the rights and liabilities of members are determined by the Act and Rules and not by the bye-laws as such. 4. Notification and Orders issued from time to time by the Government, or any other Authority as prescribed under the Act, Rules there under.

8. STATUTES I n India, co-operative banks are registered under the States Cooperative Societies Act. They also come under the regulatory ambit of the Reserve Bank of India (RBI) under two laws, namely, the Banking Regulations Act, 1949, and the Banking Laws (Co-operative Societies) Act, 1965. They were brought under the RBI's watch in 1966, a move which brought the problem of dual regulation along with it. Sec3 NIA “banker” includes any person acting as a banker and any post office savings bank]. Sec56 ref to bank/bank co. includes coop bank BRA Sec 5 (b) "banking" means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawal by cheque, draft, order or other wise; (c) "banking company" means any company which transacts the business of banking1 [in India]; Explanation.--Any company which is engaged in the manufacture of goods or carries on any trade and which accepts deposits of money from the public merely for the purpose of financing its business as such manufacturer or trader shall not be deemed to transact the business of banking within the meaning of this clause; As per sec. 3 BRA, act dont apply to (a) a primary agricultural credit society (b) a co-operative land mortgage bank; and (c) any other co-operative society , except in the manner and to the extent specified in Part V.]

9. STATUTE CONTD. sec[7. Use of words "bank", "banker", "banking" or "banking company" (1) No company other than a banking company shall use as part of its name 2[or in connection with its business] any of the words "bank", "banker" or "banking" and no company shall carry on the business of banking in India unless it uses as part of its name at least one of such words. (2) No firm, individual or group of individuals shall, for the purpose of carrying on any business, use as part of its or his name any of the words "bank", "banking" or "banking company". (3)Nothing in this section shall apply to (a) a subsidiary of a banking company formed for one or more of the purposes mentioned in sub-section (1) of section 19, whose name indicates that it is a subsidiary of that banking company; 17 (b) any association of banks formed for the protection of their mutual interests and registered under section 25 of the Companies Act, 1956 (1 of 1956

10. Types of Cooperative Banks in India 1. Primary Co-operative Credit Society (cciv) "primary agricultural credit society" provide financial accommodation to its members for agricultural purposes or for purposes connected with agricultural activities (including the marketing of crops); and (ii) no admission of any other co-operative society as member:unless such co-operative bank subscribes to the share capital of such co-operative society out of funds PROVIDED by the State Government for the purpose; CCVI "primary credit society" : c o-operative society, NOT primary agricultural credit society,-- transaction of banking business; (ii) the paid-up share capital and reserves of which are BELOW 1 LAKH and (iii) the bye-laws of which do not permit admission of any other co-operative society as a member:UNLESS co-operative bank subscribing to the share capital of such co-operative society out of funds provided by the State Government for the purpose. Explanation.--If any dispute as to the primary object or principal business of any co-operative society referred to in clauses (cciv), (ccv) and (ccvi), a determination by the Reserve Bank ,final; ( ccv) "primary co-operative bank" means a co-operative society, NOT primary agricultural credit society, t ransacting Banking b usiness; (ii) the paid-up share capital and reserves of which min. 1 lakh ( iii) the bye-laws of which do not permit admission of any other co-operative society as a member:unless such co-operative bank subscribing to the share capital of such co-operative society out of funds PROVIDED by the State Government for the purpose;

11. PCCS The Primary Co-operative Credit Society is an association of borrowers and non-borrowers residing in a particular locality. The funds of the society are derived from the share capital and deposits of members and loans from central co-operative banks. The loans are given to members for the purchase of cattle, fodder, fertilizers and pesticides. Borrowing constitutes the most important element of their working capital. The borrowing powers of the members as well as of the society are fixed but may differ from state to state.

12. 3. NABARDA 2 ( u) “State co-operative bank” principal co-operative society in a State, the primary object of which is the financing of other co-operative societies in the State: Provided that in addition to such principal society in a State, or where there is no such principal society in a State, the State Government may declare any one or more co-operative societies carrying on business in that State to be also or to be a State cooperative bank or State co-operative banks within the meaning of this definition; The state co-operative bank is a federation of central co-operative bank and acts as a watchdog of the co-operative banking structure in the state. It procures funds from share capital, deposits, loans and overdrafts from the Reserve Bank of India. The state co-operative banks lend money to central co-operative banks and primary societies and not directly to the farmers. 5cciiia , BRA "multi-State co-operative bank" means a multi-State co-operative society which is a primary co-operative bank;] ; 3[(cciiib) "multi-State co-operative society" means a multiState co-operative society registered as such under any Central Act for the time being in force relating to the multiState co-operative societies but does not include a national co-operative society and a federal co-operative;]

13. 2. Central Co-operative Banks NABARD ACT 1981 : 2d) “central co-operative bank” means the principal co-operative society in a district in a State, financing of other co-operative societies in that district: Provided that in addition to such principal society in a district, or where there is no such principal society in a district, the State Government may declare any one or more cooperative societies carrying on the business of financing other co-operative societies in that district to be also or to be a central co-operative bank or central co-operative banks within the meaning of this definition; These are the f ederations of primary credit societies in a district and are of two types: Those having a membership of primary societies only. Those are having a membership of societies as well as individuals. The funds of the bank consist of share capital, deposits, loans and overdrafts from state co-operative banks and joint stocks. These banks provide finance to member societies within the limits of the borrowing capacity of societies. They also conduct all the business of a joint-stock bank 3. State Co-operative Banks The state co-operative bank is a federation of central co-operative bank and acts as a watchdog of the co-operative banking structure in the state. It procures funds from share capital, deposits, loans and overdrafts from the Reserve Bank of India. The state co-operative banks lend money to central co-operative banks and primary societies and not directly to the farmers.

14. 4 . Land Development Banks These are organized in 3 tiers, namely; state, central, and primary level with the objective to meet the long term credit requirements of the farmers for developmental purposes. National Bank for Agriculture and Rural Development (NABARD) supervises Land development banks. The sources of funds for these banks are the debentures subscribed by both Central and State government as these banks do not accept deposits from the general public. All the LDBs are registered under the Co-operative Societies Act. their members have limited liability. Further, unlike other co-operatives, LDBs do not have personal involvement in their functioning. under its federal structure, the LDB consists of two-tier institutions: (i) the Central Land Development Bank at the State level, and (ii) the Primary Land Development Bank at the district or Taluka level. Obviously, there is only one Central Land Development Bank in each state and one primary development bank at the district level. Thus, a state is normally supposed to have many primary land development banks as there are a number of districts. The Primary Land Development Banks are affiliated to the Central Land Development Bank in the State.

15. Ldb 2 nder the federal structure, the Primary Land Development Banks deal with the farmers directly and the Central Land Development Bank deals with the primary land development banks. Under unitary structure, however, the state may have more than one Central Land Development Bank and they make direct deals with the farmers. In some cases, the Central Land Development Bank has its branches spread over the State and they do direct business with the agriculturists. In some cases, the Central Land Development Bank serves as a department of the State Co-operative Bank.

16. . 5. Urban Co-operative Banks It refers to primary cooperative banks located in urban and semi-urban areas. Earlier the scope of these banks was restricted, which now has been considerably widened. They provide funds and services to small borrowers and small business. Dual Regulation of Urban Cooperative Bank Urban Co-operative Banks are regulated and supervised by State Registrars of Co-operative Societies (RCS) in case of single-State co-operative banks and Central Registrar of Co-operative Societies (CRCS) in case of multi-State co-operative banks and by the RBI. The RCS exercises powers under the respective Co-operative Societies Act of the States with regard to incorporation, registration, management, amalgamation, reconstruction or liquidation and in case of UCBs that have multi-State presence, are exercised by the CRCS. The banking related functions such as issue of license to start new banks/branches, matters relating to interest rates, loan policies, investments and prudential exposure norms are regulated and supervised by the Reserve Bank under the provisions of the Banking Regulation Act, 1949.

17. COOPERATIVES FUND Cooperative banks in India fund rural are as under: Agriculture -Livestock -Milk-Nursery Personal finance Cooperative banks in India finance urban areas by virtue of: Self-employment Industries Small-scale units Home finance Consumer finance Personal finance

18. Functions of Cooperative Banks financial assistance to people with small means and protects them from money lenders providing loans and other services at a higher rate at the expense of the needy. It supervises and guides affiliated societies. Rural financing- It provides financing to rural sectors like cattle farming, crop farming, hatching, etc. at comparatively lower rates. Urban financing- it provides financing for small scale industries, personal finance, home finance, etc. mobilises funds from its members and provides interest on the invested capital. Cooperative banks differ from commercial banks on the grounds of organisation, governance, interest rates, the scope of functioning, objectives and values.It is formed to promote the upliftment of financially weaker sections of the society and to protect them from the clutches of money lenders who provide loans at an unreasonably high-interest rate to the needy.

19. Objectives of Cooperative Banks To provide rural financing and micro-financing. To remove the dominance of money lenders and middleman. To provide credit services to agriculturalists and weaker sections of the society at comparatively lower rates. To provide financial support and personal financial services to small scale industries, housing financial assistance, etc. To provide basic banking services to its members. To promote the overall development of rural areas.

20. ORIGIN INDIA COOP BANKING 1889 - The first known mutual aid society in India was probably the "Anyonya Sahakari Mandali" organised in the erstwhile princely State of Baroda in under the guidance of Vithal Laxman also known as Bhausaheb Kavthekar. Urban co-operative credit societies, in their formative phase came to be organised on a community basis to meet the consumption oriented credit needs of their members. Salary earners" societies inculcating habits of thrift and self help played a significant role in popularising the movement, especially amongst the middle class as well as organized labour. From its origins then to today, the thrust of UCBs, historically, has been to mobilise savings from the middle and low income urban groups and purvey credit to their members - many of which belonged to weaker sections. 1904, - The enactment of Cooperative Credit Societies Act, however, gave the real impetus to the movement. The Cooperative Credit Societies Act, 1904 led to the formation of Cooperative Credit Societies in both rural and urban areas. The act was based on recommendations of Sir Frederick Nicholson (1899) and Sir Edward Law (1901). Their ideas in turn were based on the pattern of Raiffeisen and Schulze respectively. first urban cooperative credit society was registered in Canjeevaram (Kanjivaram) in the erstwhile Madras province in October, 1904.

21. Amongst the prominent credit societies were the Pioneer Urban in Bombay (November 11, 1905), the No.1 Military Accounts Mutual Help Co-operative Credit Society in Poona (January 9, 1906). Cosmos in Poona (January 18, 1906), Gokak Urban (February 15, 1906) and Belgaum Pioneer (February 23, 1906) in the Belgaum district, the Kanakavli-Math Co-operative Credit Society and the Varavade Weavers" Urban Credit Society (March 13, 1906) in the South Ratnagiri (now Sindhudurg) district. The most prominent amongst the early credit societies was the Bombay Urban Co-operative Credit Society, sponsored by Vithaldas Thackersey and Lallubhai Samaldas established on January 23, 1906. T he Act only permitted the registration of credit societies ; no provision for the protection of non-credit societies or federal societies. These shortcomings to remedy it; The Cooperative Credit Societies Act, 1904 was amended in 1912, known as the Cooperative Societies Act of 1912 . It recognized the formation and organisation of non-credit societies and the central co-operative federations. The Cooperative Societies Act of 1912, further gave recognition to the formation of non-credit societies and the central cooperative organizations. PRE INDEPENDENCE

22. In the present day context, it is of interest to recall that during the banking crisis of 1913-14 , when no fewer than 57 joint stock banks collapsed, there was a there was a flight of deposits from joint stock banks to cooperative urban banks. Maclagan Committee chronicled this event "As a matter of fact, the crisis had a contrary effect, and in most provinces, there was a movement to withdraw deposits from non-cooperatives and place them in cooperative institutions, the distinction between two classes of security being well appreciated and a preference being given to the latter owing partly to the local character and publicity of cooperative institutions but mainly, we think, to the connection of Government with Cooperative movement". with a view to broad basing it to enable organisation of non-credit societies. The Maclagan Committee of 1915 was appointed to review their performance and suggest measures for strengthening them. The committee observed that such institutions were eminently suited to cater to the needs of the lower and middle income strata of society and would inculcate the principles of banking amongst the middle classes. The committee also felt that the urban cooperative credit movement was more viable than agricultural credit societies. The recommendations of the Committee went a long way in establishing the urban cooperative credit movement in its own right. highlighted the deficiencies of in cooperative societies which seeped-in due to lack of proper education to the masses. He also laid down the importance of Central Assistance by the Government to support the movement. In 1919, after the end of the first world war under the Treaty of Versailles,1919, t he Montague Chelmsford Reforms were introduced in India under which Cooperation becomes a transferred subject which was to be administered by the States. The need for separate acts for effective implementation and to widen the reach of the cooperative banks was felt by the States. Cooperation became a State subject in 1919.

23. The constitutional reforms which led to the passing of the Government of India Act in 1919 transferred the subject of "Cooperation" from Government of India to the Provincial Governments. The Government of Bombay passed the first S tate Cooperative Societies Act in 1925 "which not only gave the movement its size and shape but was a pace setter of cooperative activities and stressed the basic concept of thrift, self help and mutual aid." The Bombay Provincial Government was the first to pass its own act which was known as Bombay Provincial Cooperative Societies Act, 1925. Madras, Bengal, Bihar and Punjab followed the Bombay Act and passed their own legislation in the following years. This marked the beginning of the second phase in the history of Cooperative Credit Institutions. There was the general realization that urban banks have an important role to play in economic construction. This was asserted by a host of committees. The Royal Commission on A griculture 1928 , en umerated the importance of education of members/staff for effe ctive implementation of cooperative movement. The Indian Central Banking Enquiry Committee (1931) felt that urban banks have a duty to help the small business and middle class people. Land Mortgage Cooperative Banks were established in 1938 to provide loans initially for debt relief and land improvement.9.Reserve Bank of India started refinancing cooperatives for Seasonal Agricultural Operations from 1939 The Mehta-Bhansali Committee (1939), recommended that those societies which had fulfilled the criteria of banking should be allowed to work as banks and recommended an Association for these banks. In 1942, the British Government enacted the Multi-Unit Cooperative Societies Act, 1942, the ambit of which covered societies whose operations are extended to more than one state. The Act provided for the regulation of affairs of such society by the provisions of cooperative societies act of the state where the principal business of the society is located.

24. Post-independence period:1 Saraiya Committee, in 1945, further recommended the setting up of a Cooperative Training College in every state and a Cooperative Training Institute for Advanced Study and Research at the Central level. The Co-operative Planning Committee (1946) went on record to say that urban banks have been the best agencies for small people in whom Joint stock banks are not generally interested. Rural Banking Enquiry Committee (1950), impressed by the low cost of establishment and operations recommended the establishment of such banks even in places smaller than taluka towns. n 1951, 501 Central Cooperative Unions were renamed as Central Cooperative Banks.Central Committee for Cooperative Training in 1953, constituted by RBI for establishing Regional Training Centre . T he First Five Year Plan recognised the importance of cooperatives in the implementation of development plans, particularly targeting the farmers and weaker section of the society.n 1954, Government of India’S committee called All India Rural Credit Survey Committee to first delve into the problems of Rural credit and other financial issues of rural society THAT recommended a well defined institutional framework for cooperative organizations, particularly for meeting the needs of rural India. The recommendations of the committee were recognised and were put into effect under the Second Five Year Plan .

25. Post independence :2 he first study of Urban Co-operative Banks was taken up by RBI in the year 1958-59. The Report published in 1961 acknowledged the widespread and financially sound framework of urban co-operative banks; emphasized the need to establish primary urban cooperative banks in new centers and suggested that State Governments lend active support to their development. In 1963, Varde Committee recommended that such banks should be organised at all Urban Centres with a population of 1 lakh or more and not by any single community or caste. The committee introduced the concept of minimum capital requirement and the criteria of population for defining the urban centre where UCBs were incorporated. I IT recommended expanding the scope of cooperative activities t o other fields with special emphasis on the warehousing sector. T he Third Five Year Plan emphasised on training personnel for the cooperative sector and to increase the reach of the cooperative movement.

26. CONTD The Fourth Five Year Plan recommended consolidation of a cooperative system for effective functioning. The Fifth Five Year Plan recommended the establishment of Farmers Service Societies. Sixth Five Year Plan developed a point programme for a cooperative society to bring economic development and for expanding the scope of cooperative societies. The Seventh Five Year Plan also focussed on expansion and growth of the scope of cooperative societies so as to achieve greater employment and decrease poverty in the country.

27. INTERNATIONAL ORIGINS:0………..scotland in 1498. The Shore Porters Society, for example, claims to be one of the world’s first cooperatives, being established in Aberdeen, Scotland, It was a removal, haulage and storage company, originating as a group of porters working in Aberdeen Harbor. The first documented consumer cooperative was founded [1] in a barely furnished cottage in Fenwick, East in 1 769,Ayrshire, when local weavers manhandled a sack of oatmeal into John Walker's whitewashed front room and began selling the contents at a discount, forming the Fenwick Weavers' Society. A further example was in New Lanark, Scotland where Robert Owen (1771–1858) and other mill owners agreed to limit their returns on invested capital and to use residual profits that accrued for the benefit of the entire community ( Royle, 1998 ). In the decades that followed more Scottish cooperatives formed, including Lennoxtown Friendly Victualling Society, founde d in 1812 . The focus of the Lennoxtown group was operation of the busy Lennox Mill, where tenants of the Woodhead estate brought their corn to be ground. Another significant event of the group was the establishment of the calico printing works at Lennoxmill on a site adjacent to the corn mill. The printing of calico and other cotton cloth was soon established as a major industry in the area.

28. COOP BANK INTERNATIONAL HISTORY :1…….germany Cooperative financial institutions originated in Germany in the mid-19th Century as philanthropic self-help institutions designed to encourage workers to join resources and accumulate savings. Hermann Schulze-Delitzsch (1808–83), a politician and judge, founded the first urban credit cooperative in 1850. Friedrich Wilhelm Raiffeisen (1818–88), a mayor in Western Rhineland, formed the first rural credit cooperative in 1864. Raiffeisen emphasised Christian principles as the motivation for the establishment while Schulze-Delitzsch was mainly concerned with promoting economic self-sufficiency ( Aschhoff, 1982 ; Guinnane, 2001 , Guinnane, 2002 ). A principal purpose of early credit cooperatives was to draw outside funds into communities that needed them, not as charitable donations, but as loans to be repaid ( Isbister, 1994 ). The model quickly spread to other countries in Europe. First to surrounding countries, namely Austria, Italy, Switzerland and the Netherlands then west to Belgium, France and Spain and eventually north to Finland and Sweden ( Birchall, 2013b ; Colvin & McLaughlin, 2014 ). 3 It was the idea of Hermann Schulze (1808-83) and Friedrich Wilhelm Raiffeisen (1818-88) which took shape as cooperative banks of today across the world. They started to promote the idea of easy availability of credit to small businesses and for the poor segment of society. It was similar to the many microfinance institutions which have become highly popular in developing economies of today.

29. COOP BANK INTERNATIONAL HISTORY :2………....UK, IRELAND,EUROPE, NORTH AM CANADA German cooperative banking concept as adapted by Canadians inspired US credit unions that inspired UK , Irish credit unions. In Britain the friendly society, building society, and mutual savings bank were earlier forms of similar institutions. At the beginning of the 20th Century, the financial cooperative concept spread from Europe to North America. The first financial cooperative (caisse populaire) was established i n 1900 in Canada (Quebec). Alphonse Desjardins (1854–1921) , first a journalist and then a parliamentary reporter, moved by the victimization of the poor by loan sharks established the first caisse populaire (people's bank) in 1900 in his home town of Lévis in Quebec. He proceeded to set up a further 150 over the next fifteen years ( MacPherson, 1979 ; Mook, Maiorano, & Quarter, 2015 ). Desjardins helped establish the first US credit cooperative in Manchester, New Hampshire, in 1908. This was based around a Franco-American parish administered by Monsignor Pierre Hevey and it initially served French-speaking immigrants to Manchester from the Maritime Provinces of Canada ( Moody & Fite, 1984 ; Walter, 2006 ).

30. International origins:.......UK ,ROCHDALE The cooperative movement began in Europe in the 19th century, primarily in Britain and France. The industrial revolution and the increasing mechanisation of the economy transformed society and threatened the livelihoods of many workers. The concurrent labour and social movements and the issues they attempted to address describe the climate at the time. These movements were supported by governments of the respective countries. This success was achieved due to the failure of the commercial banks to fund and support the needs of small business owners and ordinary people who were outside the formal banking net. Cooperative banks helped overcome the vital market imperfections and serviced the poorer layers of society. By 1 830 , there wer e several hundred co-operatives. [3] Some were initially successful, but most cooperatives founded in the early 19th century had failed by 1840. [4] However, Lockhurst Lane Industrial Co-operative Society (founded in 1832 and now Heart of England Co-operative Society ), and Galashiels and Hawick Co-operative Societies (1839 or earlier, merged with The Co-operative Group) still trade today. [5] [6] It was not un til 1844 when the Rochdale S ociety of Equitable Pioneers established the " Rochdale Principles " on which they ran their cooperative, that the basis for development and growth of the modern cooperative movement was established. [7] though these principles helped spread cooperative movement in many parts of Europe, in British Isles it came from the revivalist Christian movement and found high acceptance with working class and lower middle class segments of society. he

31. The Pioneers In 1844 a group of 28 artisans working in the cotton mills in the town of Rochdale, in the north of England, established the first modern cooperative business, the Rochdale Equitable Pioneers Society. Primarily weavers, they faced miserable working conditions and low wages and could not afford the high prices of food and household goods. They decided that by pooling their scarce resources and working together they could access basic goods at a lower price. Initially, there were only four items for sale: flour, oatmeal, sugar, and butter. The Pioneers decided it was time shoppers were treated with honesty, openness, and respect, that they should be able to share in the profits that their custom contributed to and that they should have a democratic right to have a say in the business. Every customer of the shop became a member and so had a true stake in the business. With lessons from prior failed attempts at co-operation in mind, they designed the Rochdale Principles, and over a period of four months they struggled to pool one pound sterling per person for a total of 28 pounds of capital. On December 21, 1844, they opened their store for only two nights a week. Within three months they expanded their selection to include tea and tobacco and the business had grown so much that it was open five days a week. They were soon known for providing high quality, unadulterated goods.

32. Rochdale Principles of Cooperative movement Rochdale Principles are a set of ideals for the operation of cooperatives . They were first set out in 1844 by the Rochdale Society of Equitable Pioneers in Rochdale , England and have formed the basis for the principles on which co-operatives around the world continue to operate. The implications of the Rochdale Principles are a focus of study in co-operative economics . The original Rochdale Principles were officially adopted by the International Co-operative Alliance (ICA) in 1937 as the Rochdale Principles of Co-operation. Updated versions of the principles were adopted by the ICA in 1966 as the Co-operative Principles and in 1995 as part of the Statement on the Co-operative Identity . [1] Original version (adopted 1937) Open membership. Democratic control (one person, one vote). Distribution of surplus in proportion to trade . Payment of limited interest on capital . Political and religious neutrality. Cash trading (no credit extended). Promotion of education

33. ICA REVISION 1966 : Rochdale Principles of Cooperative movement These have evolved somewhat over time and the International Co-operative Alliance (ICA), the official governing body of cooperatives, now considers the first four of the Rochdale principles central to the governance of member organizations with the last three deemed important but not vital. The fact of the matter is that many cooperatives have very clear political or religious agendas. Most also use credit as a means of sale. The latter is critical in contemporary market economies and is often the preferred means of payment. Also, a plethora of cooperatives invest little in the domain of education Open, voluntary membership. Democratic governance. Limited return on equity . Surplus belongs to members. Education of members and public in cooperative principles. Cooperation between cooperatives

34. POST ROCHDALE UK In 1863, twenty years after the Rochdale Pioneers opened their co-operative, the North of England Co-operative Society was launched by 300 individual co-ops across Yorkshire and Lancashire. By 1872, it had become known as the Co-operative Wholesale Society (CWS). Through the 20th century, smaller societies merged with CWS, such as the Scottish Co-operative Wholesale Society (1973) and the South Suburban Co-operative Society (1984). 1990s, CWS's share of the market had declined considerably and many came to doubt the viability of co-operative model. CWS sold its factories to Andrew Regan in 1994. 2000, CWS merged with the UK's second largest society, Co-operative Retail Services. Other independent societies are part owners of the Group. Representatives of the societies that part own the Group are elected to the Group's national board. The Group manages The Co-operative brand and the Co-operative Retail Trading Group (CRTG), which sources and promotes goods for food stores.

35. Coop international : ……..CANADA ,USA German cooperative banking concept as adapted by Canadians inspired US credit unions that inspired UK , Irish credit unions. In Britain the friendly society, building society, and mutual savings bank were earlier forms of similar institutions. At the beginning of the 20th Century, the financial cooperative concept spread from Europe to North America. The first financial cooperative (caisse populaire) was established i n 1900 in Canada (Quebec). Alphonse Desjardins (1854–1921) , first a journalist and then a parliamentary reporter, moved by the victimization of the poor by loan sharks established the first caisse populaire (people's bank) in 1900 in his home town of Lévis in Quebec. He proceeded to set up a further 150 over the next fifteen years ( MacPherson, 1979 ; Mook, Maiorano, & Quarter, 2015 ). Desjardins helped establish the first US credit cooperative in Manchester, New Hampshire, in 1908. This was based around a Franco-American parish administered by Monsignor Pierre Hevey and it initially served French-speaking immigrants to Manchester from the Maritime Provinces of Canada ( Moody & Fite, 1984 ; Walter, 2006 ). The mantle for credit cooperatives in the US was then taken up by Pierre Jay (1870–1949), the commissioner of Banks in Massachusetts, and Edward Filene (1860–1937), a Boston businessman and philanthropist. These individuals promoted and were instrumental in the passing of the Massachusetts Credit Union Enabling Act in 1909, the first credit union legislation in the US. A further person of influence in the US was Roy Bergengren (1879–1955) who along with Filene formed the Credit Union National Extension Bureau which was tasked with l obbying for credit union legislation at both State and Federal level. In 1934, the Federal Credit Union Act was passed.

36. CASELAWS SOMA SURESH KUMAR VS. A.P GOV 2013 10SCC 677 UPENDRA KUMAR V DON FINANCE CORPORATION AIR 2009 KAR 184 [ S C GREATER BOM COOP BANK VS UNITED YARN TEX (P) LTD 2007 6SCC 236 A.P VARGHESE V KERALA STATE COOPERATIVE BANK AIR 2008 KER 91 VINAY KR SINGH VS JHARKHAND AIR2009 JHAR 90