Cooperative Banking Structure has a unique position in the rural credit delivery system of India. The cooperative banking sector especially with their existence of about a century has made significant strides in the field of rural credit. Since then, the co-operative credit institutions, both in the short and the long term structures continued to play their crucial role in dispensation of credit for agriculture and rural development. Over the years, they have remained the prime institutional agencies with their vast network, wider coverage and outreach extending to remotest part of the country. Both the short term and long term cooperative credit institutions are basically farmers' organisations primarily meant to meet their credit related requirements. Although commercial banks since nationalisation, have entered rural areas and opened large number of branches and RRBs have also established a large network of rural branches to cater to the credit need of rural poor, cooperatives continue to enjoy a place of crucial importance in the rural credit scenario. There are some niche areas where cooperatives have no competitors and cannot be replaced. The reasons for their essential existence are as under:-

• These institutions are primarily owned by the farmers, rural artisans, etc.

• They have been set up with the objective of promoting thrift and mutual help.

Cooperative credit societies at the grass root level are intended not only to cater to credit requirements of the members but also to provide several other credit linked services like input supply, storage and marketing of produce, etc. Keeping in view these special features of cooperatives, time and again, their role in dispensation of credit and allied services in the rural areas has been emphasised and their relevance underlined by several Committees right from the All India Rural Credit Survey Committee in the early 50s to Expert Committee on Rural Credit (ECRC), 2000.

From a meagre credit share of 2.7 percent during the early 50's, the share of agricultural credit purveyed by cooperatives has increased to a phenomenal 45 percent by March 2001.

Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India has announced National Policy on cooperatives. As outlined by them, the basic concepts of the cooperatives are as under:

"A co-operative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly-owned and democratically-controlled enterprise".

"Co-operatives are based on the principles of self-help, self-responsibility, democracy, equality and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others."

• 1st Principle: Voluntary and Open Membership: Cooperatives are voluntary organisations, open to all persons able to use their service and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

• 2nd Principle: Democratic Member Control : Cooperatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary cooperatives, members have equal voting rights (one member, one vote) and cooperatives at other levels are also organised in a democratic manner.

• 3rd Principle: Member Economic Participation: Members contribute equitably to, and democratically control, the capital of their cooperative. At least, part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes : developing their cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

• 4th Principle: Autonomy and Independence: Cooperatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their cooperative autonomy.

• 5th Principle: Education, Training and Information: Cooperatives provide education and training for their members, elected representatives, managers, and employees so that they can contribute effectively to the development of their cooperatives. They inform the general public - particularly young people and opinion leaders - about the nature and benefits of cooperative.

• 6th Principle : Cooperation among Cooperatives: Cooperatives serve their members most effectively and strengthen the cooperative movement by working together through local, national, regional and international structures.

• 7th Principle: Concern for Community : Cooperatives work for the sustainable development of their communities through policies approved by their members.

• Ensuring functioning of the cooperatives based on basic cooperative rules and principles.

• Revitalisation of the cooperative structure particularly, in the case of agricultural credit.

• Reduction of regional imbalances through support from Central Government / State Government particularly in the under- developed and cooperatively under- developed states / regions.

• Strengthening of cooperative education and training and Human Resource Development for professionalisation of the management of the Cooperatives.

• Greater participation of members in the management of cooperatives and promoting the concept of user members.

• Amendment / removal of provision in cooperative laws providing for the restrictive regulatory regime.

• Evolving a system of integrated cooperative structure by entrusting the federations predominantly with the role of promotion, guidance, information systems, etc. to their affiliated members and potential members.

• Evolving the system of in-built mechanism in cooperative legislation to ensure timely conduct of general body meetings, election and audit of cooperative societies.

• Ensuring that the benefits of the cooperatives endeavour to reach the poorer sections of the society and encouraging the participation of such sections and women in management of cooperatives

[Source: Website of NABARD]