Cooperative Banks
A Cooperative Bank is a cooperative society engaged in the business of banking.
The co-operative banks, functioning in one state only are registered under the state laws on co-operative societies.
The co-operative banks operating in more than one state, are registered under the multi-state Co-operative Societies Act. The Banking Regulation Act is applicable to co-operative banks as provided in Section 56 of that Act with certain modifications. For this purpose, a co-operative bank means a state co-operative bank, Central co-operative bank and a primary co-operative bank.
While, the constitution of the bank is governed by the co?operative laws, the business of banking undertaken by them is regulated by the Reserve Bank under the BR Act.
a. If a cooperative bank operates in only one state the state law applies and in case cooperative banks operates in more than one state then the Central Act applies.
b. A cooperative bank means a state cooperative bank, central cooperative bank and a primary cooperative bank.
A cooperative bank shall not grant any loans and advances as under :
a. Loans and advances against its own shares.
b. Unsecured loans or advances to any of its directors
c. Directors interest
d. Unsecured loans and advances in which the Chairman managing agent etc.
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