UP Board Solutions Class 10 Commerce Chapter 15 Co Operative Banks

Co-Operative Banks Objective Type Questions (1 Mark)

Question 1. Indian Co-operative Society Act was passed in the year:
(a) 1902
(b) 1904
(c) 1906
(d) 1908
Answer: (b) 1904
In simple words: The Indian Co-operative Societies Act, which governs co-operative organizations, was officially enacted in the year 1904.

🎯 Exam Tip: Remember key dates for legal frameworks governing financial institutions, as they are often tested for historical context.

Question 2. Liability of the members of the Rural Co-operative Credit Society is:
(a) Unlimited
(b) Limited
(c) Either (a) or (b)
(d) None of these
Answer: (a) Unlimited
In simple words: In a Rural Co-operative Credit Society, members have unlimited liability, meaning they are personally responsible for all debts if the society fails.

🎯 Exam Tip: Differentiate between unlimited and limited liability for various types of co-operative societies; this is a fundamental concept.

Question 3. Mainly the ......... are the members of Rural Co-operative Credit Society.
(a) Villagers
(b) Farmers
(c) Businessman
(d) None of these
Answer: (b) Farmers
In simple words: Rural Co-operative Credit Societies primarily serve farmers, providing them with financial assistance for agricultural needs.

🎯 Exam Tip: Understand the target demographic for different types of co-operative banks to explain their purpose and function effectively.

Question 4. Central Co-operative Banks are situated in .........
(a) Each town or Village
(b) Each Country
(c) Each district or tehsil of the state
(d) None of these
Answer: (c) Each district or tehsil of the state
In simple words: Central Co-operative Banks operate at the district or tehsil level within a state, serving as a link between primary societies and state-level banks.

🎯 Exam Tip: Know the hierarchical structure of co-operative banks, including their operational areas (village, district, state) and their respective roles.

Question 5. The President of India passed an ordinance on .......... for the establishment of Regional Rural Banks.
(a) 23rd Sept 1975
(b) 25th Aug 1975
(c) 22nd Aug 1975
(d) 22nd Sept 1975
Answer: (d) 22nd Sept 1975
In simple words: An ordinance was issued by the President of India on September 22, 1975, which led to the establishment of Regional Rural Banks to cater to rural credit needs.

🎯 Exam Tip: Specific dates for significant financial institutions like RRBs are important for historical and regulatory knowledge.

Co-Operative Banks Definite Answer Type Questions (1 Mark)

Question 1. What is the authorised capital of Regional Rural Bank?
Answer: One crore.
In simple words: The initial capital that a Regional Rural Bank is legally permitted to have is one crore Rs..

🎯 Exam Tip: Knowing the authorized capital helps understand the scale and financial backing of such institutions.

Question 2. How many members required to form Primary Co-operative Credit Societies?
Answer: Ten Persons
In simple words: A minimum of ten individuals are needed to establish a Primary Co-operative Credit Society.

🎯 Exam Tip: Basic formation requirements, like the minimum number of members, are key details for understanding organizational structure.

Question 3. In which schedule Regional Rural Banks are included by the Reserve Bank of India?
Answer: Schedule II.
In simple words: Regional Rural Banks are listed under the Second Schedule of the Reserve Bank of India Act, classifying them as scheduled commercial banks.

🎯 Exam Tip: Understanding the RBI schedules helps categorize different types of banks and their regulatory framework.

Question 4. How many branches were established in Uttar Pradesh of Regional Rural Banks till September 1982?
Answer: 326.
In simple words: By September 1982, Uttar Pradesh had 326 branches of Regional Rural Banks operating to serve its rural population.

🎯 Exam Tip: Specific data points, like the number of branches in a region, can illustrate the growth and reach of banking institutions.

Co-Operative Banks Very Short Answer Type Questions (2 Marks)

Question 1. How the condition of these societies can be improved? Give any two suggestions.
Answer: Suggestions for improving Co-operative Banks are as follows:
• The people should be made educated in order to make them understand the importance of co-operation.
• The employees should be taught the banking principles which will help in the proper management of the banks.
In simple words: To improve co-operative banks, it's crucial to educate members on co-operation's value and train employees in sound banking practices for better management.

🎯 Exam Tip: When providing suggestions for improvement, focus on practical and impactful areas like education and training for comprehensive answers.

Question 2. Give types of Co-operative Banks?
Answer: Kinds of Indian Co-operative Banks are as follows:
1. Primary Co-operative Credit Society.
• Rural Co-operative Society
• Urban Co-operative Society.
2. Central Co-operative Bank.
3. Provincial or State Co-operative Bank.
In simple words: Co-operative banks in India are broadly classified into three tiers: Primary Societies (rural and urban), Central Co-operative Banks at the district level, and State Co-operative Banks at the provincial level.

🎯 Exam Tip: Clearly listing and briefly explaining each type of co-operative bank demonstrates a good understanding of their structure.

Question 3. Write two drawbacks of Co-operative Credit Societies?
Answer: Two drawbacks of co-operative credit societies are as follows:
• Illiteracy: In our country major portion of the population is uneducated and they do not understand what is the corporation.
• Dishonest Members and no proper records are kept: The records of these societies are not kept properly nor they are audited. The members are dishonest and indulge in fraudulent practices.
In simple words: Key drawbacks include widespread illiteracy among members, hindering their understanding of co-operation, and issues with dishonest members leading to poor record-keeping and fraudulent activities.

🎯 Exam Tip: Focus on systemic issues like education and governance when discussing drawbacks, as these have broad implications.

Co-Operative Banks Short Answer Type Questions (4 Marks)

Question 1. Distinguish between Rural Co-operative Credit Society and Urban Co-operative Credit Society.
Answer: Difference between Rural and Urban Co-operative Credit Society.

🎯 Exam Tip: When comparing, use a clear table format to highlight contrasting features like operational area, member liability, and objectives, which aids in scoring.

Co-Operative Banks Long Answer Type Questions (8 Marks)

Question 1. What are the causes of failure of the cooperative banks in our country? What steps should be taken to make them useful?
Answer: Defects of Co-Operative Banks or Credit Societies The Co-operative movement in our country could not get the desired success. The Co-operative Banks have been able to solve the problem of rural debts in a very small area. The main reason for it, are the defects in co-operative credit societies which are as follows :
1. Illiteracy: In our country major portion of the population is uneducated and they do not understand what is co-operation.
2. Self Interest of Members: The members of the society provide loans to their friends and relatives because of which other members are not benefitted and do not get the facility of loan. Sometimes it also happens that these loans are not recovered from the friends and relatives of the members.
3. Improper Functioning: In rural areas, the members responsible for the proper functioning of society do not have knowledge of banking, so they are unable to handle the affairs properly.
4. Dishonest Members and no proper records are kept: The records of these societies are not kept properly nor they are audited. The members are dishonest and indulge in fraudulent practices.
5. Lack of Co-operation: The basic principle of co-operative societies is co-operation and co-ordination among the members, but in India, we find that it lacks among the members. In every village of our country there is groupism, casteism, etc. then under these circumstances how can we expect co-operation and co-ordination among the members.
6. Lack of Funds: The Indians are poor and they are not able to deposit money with the societies which result in lack of funds with the society. Due to lack of funds, the members are not able to get the loans according to their needs.
7. A problem in getting Loan: The members face problem in getting the loan because before giving the loan, the society checks the credibility of the member and other formalities have to be completed. All this takes a lot of time and the member is unable to get the loan at the time of need. Ultimately they have to take a loan from money-lenders or Mahajan.
8. Government's Intervention: The people do not have much faith in societies because of the government's intervention.in them. The major defect of the Indian Co-operative movement is that it has been implemented by the government requiring the fulfilment of a lot of many formalities and for this reason, the people do not have any interest towards this movement.
9. The high rate of Interest: The rate of interest charged by these societies is high because they do not have adequate funds and they have to borrow from others. These societies borrow money from Central Co-operative Banks at a higher rate of interest. The rate of interest charged by these societies should be normal So that there is no burden on the members. Generally, the rate of interest charged by these societies is ranging in between 10% to 14%.
10. The problem of loan repayment: The loans are not repaid by the members in time. As already told that the societies do not have adequate funds and when the loans are not repaid in time, these societies face an uphill task. The outstanding loans are increasing day by day and major portion of the debts become bad.
11. Societies only provide financial assistance: The Co-operative societies only provide financial assistance whereas they should also perform the activities of sale and purchase. Multi-purpose co-operative societies can only take out the people of rural areas from the grip of the Mahajan's.
12. A very little number of people becoming members: All the persons are unable to become members of society. Thus, only a small number of persons who are financially sound take advantage of society.
13. Poor Financial Condition: The financial condition of these societies is always very weak. When they do not have adequate funds then how can they provide financial assistance to others? The members do not take much interest in society because their financial needs always remain unfulfilled.
14. Only influential persons become members: The persons who are wealthy or those who have a political approach become the members of these societies. The poor people do not get any assistance from these societies in spite of the fact that these societies are meant for poor.
15. Political Interference: These societies are now in the grip of the political leaders and the basic principle for the formation of these societies has been defeated by these leaders. In many places, these leaders have formed the co-operative societies which are closed after receiving aid from the government.
Suggestions for Improving Co-Operative Banks Suggestions for improving Co-operative Banks are as follow:
1. The people should be made educated in order to make them understand the importance of co-operation.
2. The employees should be taught the banking principles which will help in the proper management of the banks.
3. Only short term loans should be given so that all the members are benefitted.
4. The penalty should be imposed if the loans are not repaid in time.
5. Before giving the loan it should be checked whether the loan is being given for productive needs or not.
6. The Central Bank should give loan to these societies on a lower rate of interest.
7. The records should be properly kept by these societies which should be inspected and audited from time to time so that fraudulent practices are minimised.
8. There should be a maximum limit for granting a loan and no member should be given loan more than the maximum limit.
9. The principles of co-operative should be made known to the public.
10. The government should also help these societies according to their needs.
11. These societies should increase their reserve funds which will make their financial position strong.
12. Instead of competing with these societies, the Commercial Banks should provide assistance to them.
13. In addition to co-operative credit societies, multi-purpose co-operative societies should be formed so that they could also help the people in other walks of life.
14. These societies should be kept free from politics and there should be minimum interference of the government.
15. The co-operative societies should try to get deposits so that their financial position will become strong.
In simple words: Co-operative banks in India often fail due to member illiteracy, self-interest, improper functioning, lack of funds, and political interference, among other issues. To improve, they need educated members, trained staff, lower interest rates, strict loan recovery, better record-keeping, increased deposits, and reduced government intervention.

🎯 Exam Tip: For long answer questions, structure your answer into "causes of failure" and "suggestions for improvement" with distinct, well-explained points for maximum clarity and score.

Question 2. Describe the achievements of Co-operative moment in India.
Answer: Achievements of the Co-operative Movement in India: The main achievements of the Co-operative Movement in India are as below:
1. Co-operation: It has encouraged a feeling of co-operation among rural people towards economic progress.
2. The decrease in the influence of sahukars: The contribution of chukars to rural credit has come down to about 16 per cent from earlier 70 per cent contribution.
3. The decline of conservative attitude: The co-operative movement has significantly modified the conservative attitude of rural people to a give-up the ancient custom of death-feast, etc.
4. Cheap credits: The interest charged by the co-operatives is much less than that charged by sahukars and so rural people now avail the facility of cheap credits.
5. Amount of loans: The amount of loans given to rural industries and agriculture has increased substantially and since it is quite cheap, these people have been appreciably benefitted.
6. Reduction of debts on farmers: Because of credit co-operatives, the debts on farmers are regularly reducing.
7. New methods of agriculture: The credit co-operatives have guided the farmers to learn to adopt new and improved methods, and for purchasing various equipment, cheap credits have been made available by these co-operatives.
8. New hope for development: Because of the co-operative movement, a new hope of economic development has encouraged rural people for doing hard work.
9. The habit of thrift: Since the facilities of deposits have reached their doorsteps, the habit of thrift has been inculcated amongst the rural people.
10. Storage and marketing: Co-operative societies now help in arranging facilities of storage and marketing to farmers. A farmer can now sell his produce through co-operative society.
11. Economic improvements: Non-credit societies like Housing Co-operatives, Consumer Co-operatives, etc., have helped in achieving economic improvements among rural and urban people.
In simple words: The Co-operative Movement in India has fostered co-operation, reduced the dominance of moneylenders, changed conservative attitudes, provided cheaper credit, increased agricultural loans, and encouraged savings and modern farming methods, leading to overall economic improvement in rural and urban areas.

🎯 Exam Tip: When detailing achievements, use specific examples like the reduction in moneylender influence or promotion of thrift to illustrate the impact effectively.

Question 3. Point out the distinguishing features of Co-operative Bank and Commercial Banks.
Answer: Difference between Co-operative Bank and Commercial Banks:

🎯 Exam Tip: A comparative table is excellent for distinguishing features. Ensure you cover key aspects like target audience, objective, regulation, and interest rates for a comprehensive answer.

Question 4. Write the importance of Co-operative Bank in Rural Economy.
Answer: Importance of Co-operative Bank in Rural Economy. India is a country of villages. The people living in rural areas are poor. The development of the country depends upon the economic development of the villages. The financial position of our rural areas was never good and because of it, our agriculture could not improve. Someone has rightly said: "The Indian farmer horns in indebtedness leads his life in indebtedness and dies leaving the burden of indebtedness on his heirs."
The shortage of funds for agriculture purposes are fulfilled by money-lenders or Mahajan. The money-lenders charge a very high rate of interest because they enjoy the monopoly. The poor farmers are unable to repay the loan and are always at the mercy of the money-lenders. The cottage industries do not prosper due to lack of financial assistance. The artisans to have to depend on the money-lenders.
In simple words: Co-operative banks are vital for the rural economy by providing affordable credit, reducing reliance on exploitative moneylenders, and supporting agricultural and cottage industries, thereby helping alleviate rural indebtedness and fostering economic development.

🎯 Exam Tip: When discussing importance, link the benefits directly to the challenges faced by the specific sector (rural economy in this case) to show relevance and understanding.

Question 5. What is the Co-operative Bank? Describe its importance also.
Answer: Co-operative Bank: When some persons join together to form a society and start accepting deposits and provide loans to their members then that society is known as Co-operative Bank or Co-operative Credit Society. The main objective of the Co-operative Bank is to provide financial assistance to people who are poor and do -not have any resources. These banks accept small deposits from the members and often ask the members to subscribe to the share capital of the bank. The bank helps the members of the bank by giving them loans for productive needs from time to time.
Importance of Co-operative Bank: The main object of Co-operative Banks is to provide financial assistance to poor. Following are the main advantages of Co-operative Banks:
1. The rate of interest charged is low and the needy have not to go to the money-lenders for financial assistance.
2. The people develop the habit of saving.
3. The members gain confidence as all of them work with the Co-operation of each other.
4. People become independent and they have not to depend on others. They also develop a feeling of responsibility.
5. Agriculture and industry receive encouragement.
6. People are encouraged to utilise their money for productive functions.
7. Development of agriculture and cottage industries makes the farmers financially sound.
In simple words: A Co-operative Bank is a society formed by individuals to accept deposits and provide loans, primarily aiming to offer affordable financial assistance to less-resourced members. Its importance lies in promoting savings, providing cheap credit, fostering self-reliance, supporting agriculture and small industries, and encouraging productive use of funds.

🎯 Exam Tip: Define the concept first, then elaborate on its importance by listing distinct benefits. This structure helps in presenting a complete and clear answer.

UP Board Solutions for Class 10 Commerce