What are cooperative banks?

Cooperative banks are financial institutions owned and operated by their members, who are also its customers. They work on the principles of cooperation, self-help, and mutual benefit. Profits earned by the bank are either reinvested into the institution or distributed among members in proportion to their transactions or shareholding. Cooperative banks cater to the financial needs of rural areas, small businesses, and agricultural communities, offering loans at relatively low interest rates and providing easy access to credit. They play a vital role in promoting financial inclusion and community development. These banks operate under cooperative societies acts and are regulated by the central bank of the country. Their democratic structure ensures that each member has an equal say in decision-making, regardless of shareholding.