Advantages And Disadvantages Of Cooperative Banking

Union Bank of Colombo PLC (“UBC or “the Bank”) was established in the year 1995 as the eighth local commercial bank in Sri Lanka. UBC was Sri Lanka’s rapid fastest expanding growing banks within the recent new entrants that offered a wide range of financial solutions with the latest technology innovations during its initial period. At the inception, the Bank was focusing on a niche market mainly consisting of a high net worth clientele. UBC continued to increase its accessibility and reach, through its network expansion and technology driven products, which were innovative and in most cases was “first” in the industry. (Refer Appendix IV). UBC continues to deliver convenience and

The government seems to be preparing the ground for the merger of Public Sector Banks (PSBs). After asking small banks to coordinate with large ones on key areas, it has now merged 19 Regional Rural Banks (RRBs) into eight entities, despite reservations by the Reserve Bank of India (RBI). It plans to merge more rural banks by the end of this financial year. RBI has expressed its displeasure at the move, saying the finance ministry didn't keep it in the loop while going ahead with the mergers. The ministry, however, argued it followed the Regional Rural Banks Act, which didn't mandate consultation with the Central Bank on such mergers. In the second round of consolidation of RRBs, the government has, for the first time, merged RRBs under different sponsor banks. The number of RRBs has been reduced to 71, as against 82 at the end of the last financial year. The government plans to reduce this number to 64 by March-end and to 48

These banks should ideally be divested of any sort of commercial interest, and must act in the best interest of its nation’s economic stability. A lot of meaning is carried out in being identified as ‘independent’ authority, where the bank possess powers to take its own decisions, approve its own legislature, follow its own policies and offer stability to the nation’s economy.

in the rural and semi-urban sector, which used to be the bastion of the State Bank

The Mission statement of the bank is to “help you make progress toward your goals”. Which means to provide simple ways to spend, save and manage the money of the consumers. Nowadays, banks operate in those sectors where the environment is stable but nonetheless many banks are facing aggressive competition but fighting back to the competition is vital role to play to generate

22. Rangrajan C, ‘Importance of Co-operative Banking under changed banking scenario’-The Bankr-The Indian Banks Association, Volume No. 44 (&) , September, 1997

Banking industry plays a very important role in the economic growth of a country. Mergers and Acquisitions have become a positive way for growth in the size of banks which in turn play a significant role in entering the competitive global financial market. The Indian banking sector can be divided into two eras, the pre liberalization era and the post liberalization era. In pre liberalization era government of India nationalized 14 Banks on 19 July 1969 and later on 6 more commercial Banks were nationalized on 15 April 1980. In the year 1993 government merged The New Bank of India and The Punjab National Bank and this was the only merger between nationalized Banks, after that the numbers of nationalized Banks reduced from 20 to

BBB Bank plc (hereby mentioned as the ‘Bank’), has a great power in the market due to the large selection of banking services and products being offered. The Bank current approach seems to be focused on profit making, with wrong selling techniques which lead to miss-selling of endowment policies. It is also being noted that the bank has invested customer’s money in derivatives which had made a loss. Apart from that, it is being stated that a whistleblower accused a member of the board of acting unethically and trying to hide the true picture of the bank’s financials.

Most managers and entrepreneurs of co-operative businesses face similar management issues. Yet the basis for their success rests with the choices they make. Any type of business will be concerned with the question of productivity: what productive role fits the business the best and where will this put the co-operative in the economic marketplace. Then it comes to a certain style in which the co-operative business differentiates from the rest. It is the style of the co-operative business that drives the performance. There are several dilemmas that a co-operative business may face when dealing with the areas of productivity and style.

Apart from the reasons mentioned, the money market as well as capital market witnessed the presence of private moneylenders, landlords etc. They have acted as bankers for centuries and have amassed major wealth from people of India that adversely affected capital formation. The need for a better financial institution and credit infrastructure was thus felt necessary by the planning commission when the five-year plans were initiated.

The banking sector occupies a pivotal position in the global economy. it is useful to understand the variety of banks. Typically, the banks can be divided into two categories, one is the local banking and other is the foreign banking.

Commercial banks have played a vital role in giving direction to economic development by catering the financial requirement of trade and industry in the country. By encouraging thrift among the people, commercial banks have fastened the process of capital formation. Banks draw the community savings into the organized sector which can then be allotted among the different economic activities according to the priorities laid down by planning authorities in the country. ‘The banks are not only the safe deposit vaults for these savings, but taking the banking system as a whole, they also create deposits in the process of their lending operations. However, the important function of a banker is the

Banks occupy a critical position in a complex financial system that supplies the money and credit needs of the economy. The unique characteristic of a commercial bank is that it also creates money, and it is this particular feature of the commercial banks which distinguishes them from non-banking financial institution.

The General Bank of India was set up in the year 1786. Next came Bank of Hindustan

21  7.1)The Role of Reserve Bank of India (RBI) – Banker’s Bank: ......................................................... 23  7.1.1)Main Objective: ................................................................................................................. 23  8)Co‐operative Banks: ........................................................................................................................ 26  8.1)There are two main categories of the co‐operative banks. ....................................................... 27  8.1.1)Features of Cooperative Banks .......................................................................................... 27