Manual for urban co-operative banks

Recent years have witnessed a notable growth in the number of primary co operative banks as well as in the volume of their business. Their number which stood at 1091 as on 1 March 1966-the date of extension of the Banking Regala tion Act, 1949 to co-operative banks-had increased to 1281 as on 30 June 1983 of which 1175 were urban banks and 106 salary earners' societies. These banks' deposits which stood at Rs. 153 crores on 30 June 1967 rose to Rs. 1994 crores as on 30 June 1983. Their loans and advances outstanding also recorded a rapid growth from Rs. 107 crores as on 30 June 1967 to Rs. 1776 crores as on 30 June 1983. Besides making advances for a variety of purposes and against various types of securities, they have undertaken other banking services like safe deposit locker facility, safe custody of valuables, collection of bills, cheques, etc., on behalf of customers.

2. With their growth, volume and variety of business, a need was keenly felt for a book of guidelines for reference by the primary co-operative banks. The Committee on Urban Co-operative Banks (1978) had also recommended that the Reserve Bank might publish early a Manual exclusively for urban banks containing guidelines on different aspects of their working. It is in response to these demands that the Reserve Bank of India has prepared this Manual for Primary Co-operative Banks.

3. The Reserve Bank had earlier published a Manual on Cash Credit Advan ces (1977) in which a whole Chapter (II) was devoted to loans and advances by primary (urban) co-operative banks. This Manual which is intended mainly for primary co-operative banks would be useful to other types of co-operative banks also.

4. The Manual attempts to cover as many important aspects as possible pertaining to the working of primary co-operative banks viz., management, raising of resources, management of funds, investments, loans and advances, customer services, etc. While in Part I, the operational guidelines such as, the various pre cautions to be observed, the documents to be obtained and the records/registers to be maintained have been indicated in respect of each activity, Part II of the Manual contains proformae of documents and registers which could be adopted by co-operative banks. It has, however, to be noted that the various forms, registers, etc., prescribed in Part II are only illustrative and urban banks are advised to adopt them with such modifications as may be considered necessary to suit their need in the light of their own experience and the local laws.

5. Although the Manual provides the general guidelines in running a primary co-operative bank, the instructions issued by the Reserve Bank of India from time to time in future and the various banking practices prevalent in the respective regions would also have to be taken into consideration.

6. In preparing this Manual several co-operative institutions have been con sulted and reference made to the Manuals prepared by some commercial banks for their internal use and we are indeed grateful to these institutions for their gene rous co-operation extended to us in this connexion.

7. I trust that the Manual will prove to be a valuable guide book to the primary co-operative banks and also serve as a reference book for the state and central co-operative banks.