The Minster of Home Affairs and Cooperation has addressed a conclave, organised by the National Federation of Urban Cooperative Banks and Credit Societies (NAFCUB), emphasising the needed Reforms for Urban Cooperative Banks (UCB).
- The NAFCUB is an Apex Level Promotional body of Urban Cooperative Banks and Credit Societies Ltd. in the Country.
- Its objective is to promote the urban cooperative credit movement and protect the interest of the Sector.
- It is an institution established on a cooperative basis to deal with the ordinary banking business.
- Cooperative banks are founded by collecting funds through shares, accepting deposits, and granting loans.
- They are Cooperative credit societies where members from a community group together to extend loans to each other, at favorable terms.
- They are registered under the Cooperative Societies Act of the State concerned or the Multi-State Cooperative Societies Act, 2002.
- The Co-operative banks are governed by the,
- Banking Regulations Act, 1949.
- Banking Laws (Co-operative Societies) Act, 1955.
- They are broadly divided into Urban and Rural cooperative banks.
- Customer Owned Entities: Co-operative bank members are both customer and owner of the bank.
- Democratic Member Control: These banks are owned and controlled by the members, who democratically elect a board of directors. Members usually have equal voting rights, according to the cooperative principle of “one person, one vote”.
- Profit Allocation: A significant part of the yearly profit, benefits or surplus is usually allocated to constitute reserves and a part of this profit can also be distributed to the co-operative members, with legal and statutory limitations.
- Financial Inclusion: They have played a significant role in the financial inclusion of unbanked rural masses. They provide cheap credit to masses in rural areas.