Financial Viability of Tier-II Cooperative Credit Institutions-A study of District Central Cooperative Banks in India

Abstract

The co-operative banks arrived in India in the beginning of the 20th Century as an official effort to create a new type of institution based on the principles of co-operative organization and management, suitable for problems peculiar to Indian conditions. These tianks were conceived as substitutes for money lenders, to provide timely and adequate short-term and long-term institutional credit at reasonable rates of interest. The cooperative banks in India play an important role in both rural and urban areas even today. In rural areas, cooperative banks mainly finance agriculture based activities including farming, cattle, milk, hatchery, personal finance etc. along with some small scale industries and self-employment driven activities. In Urban areas these mainly finance various categories of people for selfemployment, industries, small scale units, home finance, consumer finance, personal finance, etc. Cooperative banks in India have been working at three levels, viz. At State (Tier I), District (Tier II) and Village level (Tier III). The main functions of District Central Cooperative Banks (DCCBs at Tier II) are to provide finance to the primary credit societies, acceptance of deposits, granting of loans/advances, fixed deposit receipts, gold/bullion, goods and documents of title of goods, collection of bills, cheques, safe custody of valuables, agency services and work as balancing center for PACS.