These banks even provide the customers, credit card and debit card facility too to ensure the process is smooth and multiple loans will be sanctioned.
The trade finance facility is also given to the customers. It is a financial entity that belongs to its members or customers. These banks are usually formed by persons belonging to the same local or professional community or sharing a common interest. They also provide a wide range of banking and financial services to their members. These banks are formed by the people who come together to jointly serve their common interest often from a cooperative society under the act of the government, when the society engages itself in banking business it is called a bank.
Most of their operations are restricted to a particular place or a particular district and in a local area depending on the society. There are certain principles of the Co-operative bank that all the members should follow, the customers are allowed to be volunteers in joining and the membership is open for all the volunteers.
Every member should participate in all the economic activities. They should participate in all the education , training and information activities without hoping that they might get something in return.
There are some banks to take deposits from the customers and lending loans to the public and those are called Commercial banks. Cooperative banks are set up for a different purpose altogether, they are mainly established to provide financial help to business owners and farmers at a less rate of interest. Commercial Banks provide short-term, medium-term, and long-term finance to the public.
However, it usually prefers to make short-term funding. There are a variety of products offered by the banks, to its customers such as:. Cooperative Banks are the financial institutions that are owned and run by their customers and operates on the principle of one person one vote. They operate in both rural as well as urban areas and provide credit to borrowers and businesses. Cooperative Banks offer a range of services like accepting deposits and granting loans to the members and even non-members.
The members are the owners and customers of the bank at the same time. The bank offers services like deposit accounts such as savings and current account, safe keeping of valuables locker facility , loan and mortgage facility to the customers.
The bank, which operates for taking deposits from and making loans to the public is a commercial bank. On the other hand, cooperative banks are mainly established to provide financial support to small businessmen and farmers at the low rate of interest.
The big difference between these two terms is that while the network of former is very large whereas the network of the latter is confined to a limited area only.
Thanks for pointing out that the bank offers services that would offer savings accounts and other options such as mortgages. Your email address will not be published. Save my name, email, and website in this browser for the next time I comment. The Commercial banks are organized on a unitary basis. Every commercial bank which is a scheduled bank is entitled to avail of the reference facilities from the Reserve Bank.
The commercial banks work over a wide area which is not limited by the boundaries of particular state or district. The Co-operative Bank works within a given area. Till the commercial banks where urban-oriented and financed organized trade and industry. The Co-operative Bank have been basically rural-oriented and have a financing agricultural and allied activities.
Commercial banks are governed by all the Sections of the Banking Regulation Act The commercial banks proceed on sound business. The Co-operative Banks function on the principle of Co-operation.
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