Cooperatives: The Only Hope for Rural India

Abstract

The banking sector of any nation plays a crucial role in its economic development such as mobilization of savings and provision of credit. The present rural banking structure in India consists of multiple layers and serve needs of rural borrowers. The co- operative movement has been crucial in India in helping the rural poor's developmental demands be met. In order to safeguard the financial interests of the underprivileged and underrepresented in society, cooperatives are the organisations that assist individuals in utilising the power of collective bargaining. The purpose of this article is to point out the pivotal role of cooperative banks in India and the problems which are encountered by Rural Cooperative banks. This article highlights the structural impediments in this sector caused by regulatory overlap, an increase in Non Performing Assets, and frauds which have caused a decrease in depositor trust. It gives a stock of the present situation by analysing the coverage and regional variation of the cooperative banks in India. This paper highlights some areas of grave concern such as inadequate coverage, regional imbalances, high non-performing assets, high over-dues and makes recommendation to address these. Keywords: Cooperative movement, Cooperative banks, Non-performing assets, Over-dues, Rural Banking