Maharashtra Board Class 12 Cooperation Chapter 7 District Central Co operative Bank PDF Download

District Central Co-operative Bank

7.1 Introduction

In India co-operative movement was started with the first Indian Co-operative Act of 1904. Previously farmers were under the burden of loan. He was under the debt of moneylender. The moneylender were exploiting farmers. So, there was provision to establish the credit co-operative society in the co-operative act, 1904.

It was expected that co-operatives would be able to attract the deposits from the members and non-members but the expectation did not fulfill. Credit co-operative societies were not successful in increasing the capital and supply of loan to the farmers.

Taking into consideration the defects of first act 1904, the second co-operative act was made more comprehensive. By passing second act 1912, provision were made to establish co-operative society in all sectors. District Central Co-operative Bank came into existence due to provision of second co-operative act, 1912.

The government has appointed committee under the chairmanship of Sir E. D. Maclagan in the year 1914 to review the progress of the co-operative Movement in India. This committee submitted the report to the government. The committee made valuable suggestions for the improvement of the co-operative movement.

Maclagan committee recommended for the establishment of District Central Co-operative Bank. District Co-operative Bank act as a link between the State Co-operative Bank and Primary Credit Co-operative Societies at village level. Working area of this bank is restricted upto the district. District Central Co-operative Bank is a member of State Co-operative Bank. In Maharashtra the First District Central Co-operative Bank was established in Akola.

Teacher's Note

In your village, the bank which helps farmers get loans is the District Central Co-operative Bank. It is like a big helper for all small banks in your district.

Exam Trick

Remember: District = one district only. This bank works only in one district, not in the whole state. Just like your school only has students from your area.

Points to Remember

First Indian Co-operative Act started in 1904 to help farmers.
Maclagan committee gave ideas in 1914 to make the system better.
District Central Co-operative Bank connects the state bank with small village banks.
It works only in one district area.
First such bank in Maharashtra started in Akola.

7.2 Meaning and Definition

Meaning:

The bank which acts as a link between State Co-operative Bank and Primary Credit Cooperative Society is known as District Central Co-operative Bank. The union formed by the all Primary credit co-operative society in the district is known as Central co-operative bank.

Definition:

District Central Co-operative Bank is the bank which is established at district level, which provides finance to all the co-operative societies in the district and conduct the activities and provide banking services according to the provisions of the co-operative act and banking act. -Maharashtra co-operative societies act 1960 (sec. 6)

A District Central Co-operative Bank means, a bank collecting co-operative fund from district and using for financing to primary credit co-operative and co-operatives. This bank is not Primary urban co-operative Bank. -Shri. J. P. Niyogi

Teacher's Note

Think of it like this: your village bank gets money from the District Central Co-operative Bank, just like you get pocket money from your parents. The District bank is in the middle.

Exam Trick

Remember: It is a LINK, like a chain. State Bank on top, District Bank in middle, Village Bank below. District Bank connects them.

Points to Remember

It is a bank at district level, not village or state level.
It links the big state bank with small village banks.
It collects money from its area and gives loans.
It is not an urban bank; it is for farming areas.
It follows co-operative act and banking act rules.

7.3 Functions Of District Central Co-operative Bank

District Central Co-operative Bank provides finance to Primary credit co-operative societies and other co-operative societies and collect deposits for the same. District Central Co-operative Bank acts as a link between the primary credit co-operative society and State Co-operative Bank and performs following functions:

1. Accepting deposits: The branches of District Central Co-operative bank are spread at village level so various deposits are collected from the people which inculcates habit of saving among the people. Various types of deposits are accepted like current deposit, saving deposit, fixed deposit and recurring deposit etc.

2. Lending loan: The District Central Co-operative Bank provide loan to the member primary credit co-operative societies in the district. Seasonal loan is provided to the agriculture credit co-operative society in the district. Crop loan is provided for a period of 1 to 15 months which is known as short term loan. The medium-term loan for a period of 1 year to 5 years is provided for construction of well, purchase of agricultural equipment, etc. Such loan is provided by NABARD. Due to lack of finance this co-operative bank cannot provide loan of 5 to 25 years. As working area is limited up to district the deposits and share capital are less. District central co-operative bank provides short term loan and medium-term loan.

3. Bank of co-operative societies in the district: District Central Co-operative Bank act as a banker of all co-operative societies in the district. As bank of co-operative societies in the state functions for keeping the deposits of co-operative safe, transfer of money, accepting cheque, clearing cheque, providing overdraft facility. Such services are provided and to keep reserve funds safely. Such functions are conducted by district central co-operative bank.

4. Bank of state government: At the district level this Bank works as a Banker of state government. Educational institution, Zilla Parishad, Panchayat Samiti, Gram Panchayat, cooperative societies etc societies have account in this bank. All the financial transactions of co-operative sector are conducted through this bank. Various policies of the government for rural development is done by Zilla Parishad. So, it acts as a bank of State Co-operative Bank at district level.

5. Expansion of new branches: The head office of the District Central Co-operative Bank is situated at the district headquarters. It is important to have a branch of District Central Co-operative Bank for proper coordination among the co-operative societies in the district. In the same way it is important to provide banking services at village level. So, it important to open new branches in the district.

Teacher's Note

This bank helps farmers save money and also gives them loans when they need it. If your father is a farmer, he may keep his money in this bank.

Exam Trick

Remember the 10 functions by thinking: Accept money, Give loan, Help other banks, Help government, Open branches, Lead the movement, Take gold as security, Supervise, Keep balance, and Provide ATM cards.

Points to Remember

It collects money from people and keeps it safe.
It gives short-term loan for 1 to 15 months and medium-term loan for 1 to 5 years.
It acts like a bank for all other small co-operative banks in the district.
It helps the government by keeping money of schools and gram panchayat.
It opens new bank branches in villages to give better service.

This is a preview of the first 3 pages. To get the complete book, click below.