Current scenario and future prospects of urban cooperative banks in India
Dr. Hajera Fatima Khan
The cooperative banks are small sized banking units which operate both in urban and non-urban areas over the last 100 years. These banks play a pivotal role in meeting the credit requirements and development of Small & Medium size industries. It is a unique sector where banking and cooperation works together. These banks work on the basis of two tier system and on the principles of cooperation, self-help and mutual-help. Cooperative banks are playing a very crucial role in catering the credit needs of small depositors and borrowers, mainly in the urban informal sector that are deemed non-credit worthy by the commercial banks. Urban and rural cooperative banks are the different types of cooperative banks functioning in India. The urban cooperative banks also known as primary cooperative banks operate in urban and semi urban areas. These are the small size cooperatively banking units cater the needs of small scale business units, retail traders, professionals, salaries classes etc. Despite of a sustained growth, the sector has gone through a lot of turmoil in the last few years. These banks are striving relentlessly to address the issues of economic inequality and the concentration of wealth that are causing exploitation of weaker sections by the stronger. The present study analyzed the evolution of urban cooperative banks in India, its financial performance and the developments that are needed to boost the performance of the banks to have better economic growth.