INTRODUCTION

The first known mutual aid society in India was probably the Anyonya Sahakari Mandali organized in the erstwhile princely State of Baroda in 1889 . Urban co-operative credit societies, in their formative phase came to be organized on a community basis to meet the consumption oriented credit needs of their members Indian UCB sector plays an important role in meeting growing banking needs of urban and semi urban areas of the country. Urban co-operative banks are regulated and supervised by both, the State Governments, through the Registrars of Cooperative Societies, and by the Reserve Bank of India.

The financial health of these institutions has under pressure from their historic poor capitalization, low margins, high transaction costs, excessive state government control and a lack of professional management.
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INTRODUCTION cont.
The Urban Co-operative banking system is a unique sector, blending-banking and cooperation. The market driven economy of India, is today posing stiff competition for all traditional institutions like cooperative banks through deployment of more capital, advanced technology and skilled human resources. Despite showing a sustained growth, the sector has gone through a lot of turmoil in the last few years. There is an apprehension as to whether these entities will be able to survive in an increasing competitive environment. In such a competitive environment the sector has to be more efficient to survive.

STUCTURE OF COOPERATIVE BANK

Multi State (25)
Scheduled (52)

UCBs (1,618)

Single State (27)

Multi State (18)

Credit Cooperatives

(96,149)

Non Scheduled (1,566)

Single State (1,548)

Long Term (717)

Rural Cooperatives

SCARDBs (20)

PCARDBs (697)

(94,531) Short Term (93,814) StCBs (31) DCCBs (370) PACs (93,413)

(As at end March 2012)

Emergence of Model Coop. Soc. Act

Emergence of Mutually Aided, Autonomous, Enactment of MACS / Democratic cooperatives Self Reliant Cooperative Societies Acts in different states Various Committees of Cooperative Reforms

Application of Revival Package for Rural Cooperative Credit Institutions 106th Constitutional Amendment Bill (2006) placed in the Parliament

Changes in the Indian Cooperative Scenario

Legal reforms/ amendments in cooperative credit structure/societies Based on Rival Package

Re-engineering of various old Cooperative Societies Acts

New Age Financial Cooperatives -financing through SHGs + PACS continue to do rural financing

Reduction in the Governments equity and their controls

REGULATION/PROBLEMS FACED BY UCBS

dual control inadequate legal framework to regulate UCBs increasing incidence of weakness low level of professionalism apprehensions about the credentials of promoters of some new UCBs