Commercial Banks VS Cooperative Banks:
- Co-operative banks also perform the basic Banking functions but differ from commercial banks.
- Commercial banks are joint-stock companies under the companies' act of 1956, or Public Sector Bank under a separate act of a parliament whereas co-operative banks were established under the co-operative society's acts of different states.
- Commercial bank structure is branch banking structure whereas co-operative banks have a three tier setup.
- Certain sections of Banking Regulation Act of 1949 (fully applicable to commercial banks), are applicable to co-operative banks, resulting only in partial control by RBI of co-operative banks and Co-operative banks function on the principle of cooperation and not entirely on commercial parameters.
- Primary (urban) cooperative banks are required to maintain certain amount of Cash Reserve and liquid assets while
- Non-scheduled (urban) cooperative banks, should maintain a sum equivalent to at least 3 per cent of their total demand and time liabilities in India on day-to-day basis
- Apart from cash reserve, every primary (urban) cooperative bank (scheduled/non-scheduled) is required to maintain liquid assets, not less than 25 % of its demand and time liabilities, in the form of cash, gold or unencumbered approved securities in accordance with the provisions of Section 24 of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies).
