Co-operative Banks

1. Structure of the System

They are functioning on branch banking system and the branches are located in all areas such as rural, urban, etc. The Head Office controls all branches through Zonal Office.

2. Purpose of Credit

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They are generally concentrating on rural they are mainly concentrating on the credit and provide credit facilities to agric- requirements of trade and industry, cultural and rural activities.

3. Voting Rights

In co-operative banks, members living in a particular area are usually shareholders one shareholder has one vote.

In Joint Stock Commercial Banks one share one vote system is followed. Shareholder dis­persion is very wide and member can be from any part of the country. [Section 12(2) of B.R. Act, however, restricts the maximum voting rights of a shareholder to 10 per cent of total votes.

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4. Interest Rate

In co-operative banks, the rate of interest for deposits is usually high and for the loan it is lower. This position is in comparison with commercial banks.

5. Borrowers

In co-operative Banks the borrowers are usu­ally their members. Borrowers can be any one including indi­viduals and institutions.