State cooperative bank (Babar).pptx

State cooperatives banks discussing

1. ALIGARH MUSLIM UNIVERTSITY PRESENTATION ON STATE CO-OPERATIVE BANKS NAME:BABAR SALIM EN.NO: GK2728 FAC.NO:21AEM017

2. TABLE OF CONTENT INTRODUCTION History of cooperative banking Structure of cooperative Banking FUNCTION OF SCBs Capital of SCBs Loans and Advances PROBLEMS FACED BY SCBs

3. INTRODUCTION State Cooperative Banks  are the highest-level cooperative banks in each of the states. The  Maclagan Committee  emphasized the importance of establishing these banks. They raise funds and assist in their proper distribution among various sectors. Individual borrowers receive funds from state cooperative banks via  central cooperative banks  and  primary credit societies . All-State Apex Cooperative Banks in India have their own national federation, the  National Federation of State Cooperative Banks , which was founded in  1967  in Mumbai.

4. History of cooperative banking:   The history of Indian cooperative banking started with the passing of Cooperative Societies Act in 1904 The objective of this Act was to establish cooperative credit societies “to encourage thrift, self-help and cooperation among agriculturists, artisans and persons of limited means.” The Cooperative Societies Act, 1912 recognized the need for establishing new organizations for supervision, auditing and supply of cooperative credit. These organizations were- (a) A union, consisting of primary societies (b) the central banks and (c) provincial banks.

5. Structure of cooperative Banking:

6. FUNCTION OF SCBs They provide a link through which the Reserve Bank of India provides credit to the cooperatives and thus participates in the rural finance. As balancing centers for the central cooperative banks by making available the surplus funds of some central cooperative banks. The central cooperative banks are not permitted to borrow or lend among themselves. They finance, control and supervise the central cooperative banks and through them the primary credit societies.

7. Capital of SCBs: State cooperative banks obtain their working capital from own funds, deposits, borrowings   and other sources: Own funds include share capital and various types of reserves. Major portion of the share capital is raised from member cooperative societies and the central cooperative banks, and the rest is contributed by the state government. Individual contribution to the share capital is very small. The main source of deposits is also the cooperative societies and central cooperative banks. The remaining deposits come from individuals, local bodies and others. Borrowings of the state cooperative banks are mainly from the Reserve Bank and the remaining from state governments and others.

8. Loans and Advances: State cooperative banks are mainly interested in providing loans and advances to the cooperative societies. More than 98 per cent loans are granted to these societies of which about 75 per cent are for the short-period. Mostly the loans are given for agricultural purposes. The number of state cooperative banks rose from 15 in 1950-51 to 21 in 1960-61 and to 28 in 1991-92. The loans advanced by these banks increased from Rs. 42 crore in 1950-51 to Rs. 260 crore in 1960-61, and further to Rs. 7685 crore in 1991-92.

9. PROBLEMS FACED BY SCBs There have been instances where few societies have made large advances to primary credit societies and later on  recovery has become a serious problem . Overdue  have been piling up for a variety of reasons. Credit limits for central co-operative banks  have not been carefully set. The state cooperative banks are also dealing with a number of other issues.

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