Online Blogger

Co-operative banks, as the name suggests, is built on cooperative basis where owners of the bank are customers of the bank at the same time. The owners belong to same community or profession. These banks differ from stock holder banks in many criterions like their goals, governance, and their values. These banks, in some of the countries, are run by banking authorities and follow the guidelines of prudential banking regulations. Cooperative bank provides wide variety of services like loans (loan providing, simulation pret, pret immobilier), banking account, deposit etc.

Though cooperative banks follow their respective national legislation, there are many features that are common to every cooperative bank and they are customer owned entities, democratic member control and profit allocation. Customer owned entity follows that the objective of the bank is not maximize the profit of the bank, but to meet the need of the customers and provide them with the best possible services because owners are also the members of the bank. Under democratic member control the principle followed is that every member has equal voting rights and they have the choice of selecting their own board of directors. Profit allocation is done either by patronage dividend (work done) or by interest or dividend paid on number of shares held by after a significant portion is reserved for bank need.

admin Business