Performance Evaluation of Weak Urban Co-operatives Banks in West Bengal

• Author: Anupam Mitra

Introduction:

Cooperation is a form of organization wherein persons voluntarily associate together as human beings on a basis of equality and work together for a common goal. Cooperatives are based on the values of self help, self responsibility, democracy, equality, and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibility and caring for others. The cooperative principles have undergone a change over a period of time. But the spirit of cooperation remains the same. The problem of principles was considered by International Cooperative Alliance in 1937 and in 1966. Co-operative banks are a group of people organized under the provisions of the co- operative society’s act of the states. These banks are essentially co-operative credit societies organized by members to meet their short term and medium term financial requirements. The main objectives of co-operative banks are to provide cheap credit to their members. They are based on the principles of self reliance and mutual co-operation. Co operative Banks in India are registered under the Co-operative Societies Act 1904. The cooperative banks are also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

Literature Review:

Several studies were conducted on the activities of UCBs in India by the committees appointed by the RBI and the Govt. of India. Sketches on the major ones are given below: RBI taken up the first study of UCBs in the year 1958-59. The Rural Banking Enquiry Committee (1950), also commented on the role that urban co-operative banks could play in providing banking facilities.

The Madhavdas Committee (1979), evaluated the role played by urban co-operative banks in greater details and drew a roadmap for their future role recommending support from RBI and Government in the establishment of such banks in backward areas and prescribing viability standards.

The Madhava Rao Committee (1999), focused on consolidation, control of sickness, better professional standards in urban co-operative banks and sought to align the urban banking movement with commercial banks.

Bhagwati Prasad (2005), assessed that co-operative banks are constantly exposed to competition and risk...