1.

INTRODUCTION:

1.1 CO-OPERTIVE BANKING:

Co-operative bank, in a nutshell, provides financial assistance to the

People with small means to protect them from the debt trap of the
Money lenders. It is a part of vast and powerful structure of co-operative
institutions which are engaged in tasks of production, processing, marketing, distribution,
servicing and banking in India. A co-operative bank is a financial entity which belongs to its
members, who are at the same time the owners and the customers of their bank. Co-operative
banks are often created by persons belonging to the same local or professional community or
sharing a common interest. These banks generally provide their members with a wide range
of banking and financial services (loans, deposits, banking accounts…). Co-operative banks
differ from stockholder banks by their organization, their goals, their Values and their
governance.
The Co-operative Banking System in India is characterized by a
Relatively comprehensive network to the grass root level. This sector mainly focuses on the
local population and micro- banking among middle and low income strata of the society.
These banks operate mainly for the benefit of rural areas, particularly the agricultural sector.
1.2 DEFINITION:
“A Co-operative bank, as its name indicates is an institution
Consisting of a number of individuals who join together to pool their surplus savings for the
purpose of eliminating the profits of the bankers or money lenders with a view to distributing
the same amongst the depositors and Borrowers.”
The Co-operative Banks Act, of 2007 (the Act) defines a co-operative
Bank as a co-operative registered as a co-operative bank in terms of the Act
Whose members –
1. Are of similar occupation or profession or who are employed by a
Common employer or who are employed within the same business
District; or
2. Have common membership in an association or organization,
Including a business, religious, social, co-operative, labour or educational
Group; or
3. Have common membership in an association or organization,
 Including a business, religious, social, co-operative, labour or
Educational group; or

4. Reside within the same defined community or geographical area.

Co-operative Banks and Rural Development:

The term, rural development, is a subset of the broader term “development”, which is a
subjective and value-loaded concept and hence difficult to define. Howsoever we define it;
development is a universally cherished goal of individuals, families, communities and nations
all over the world. The term, ‘rural development’, connects overall development of rural
areas as revealed in improved quality of life of rural people. In this sense, it is a
comprehensive and multidimensional process and phenomenon. It encompasses the
development of Agriculture and allied activities, village and cottage industries and crafts,
socio-economic infrastructure, community services and facilities, and above all, the human
resources in rural areas. Generally speaking, development can be conceptualized
as a non- decreasing set of desirable societal objectives such as increase in real per capital
income, improvement income distribution (equity), political and economic freedom, and
equitable access to resources, education, health care, employment opportunities, and justice.
Rural development is influenced by a multitude of factors such as natural resources,
human resources (Labour), capital,technology, public policies and institutions and
organizations. Organizations affect rural development in many different ways including
provision of production inputs and services, reduction of transaction costs, enhancement of
bargaining power of rural producers vis -a- vis those to whom they sell their produce and
from whom they buy production inputs and services, facilitating investments and savings and
bringing the two together, and so on.
There are many forms of organisations such as public (government) agencies, sole
proprietorships, partnerships, companies, co-operatives and charitable trusts that can and
are,in fact, serving the needs of rural people in India. Government intervention in the rural
sector in India can be traced to the last quarter of the 19th century. Since then, the
government has expended thousands of crores of rupees on agricultural and rural
development programmes and is, by all accounts, the biggest agent of rural development. Co-
operatives also have played an important role in promoting agricultural and rural
development in India, particularly in the field of credit, processing, and marketing.
 This paper aims at examining the role of co-operatives in rural development in India. It is
mainly based on a review of the relevant literature available on the subject.
Co-operative movement in India celebrated its 100 –year jubilee in 2004. It was in 1904,
the first Co-operative Societies Act was passed in India, which marked the beginning of co-
operative movement in India. The co-operative movement was introduced in india with the
chief object of making a break-through in the stagnation of the poorer classes, especially the
vast majority of agriculturists who were groaning under the heavy weight of indebtedness. It
was the bond of debt, which was largely responsible for the deteriorating stage of agriculture
and the poverty of masses. Many of the farmers were literally born in debt, lived in debt and
died in debt, passing on their burdens to those who followed. The advent of British rule in
India marked some further deterioration in the economic conditions of the farmers.
Co-operation in India is considered as an instrument of democratic planning. The
governments, both Central and State,co-ordinate its efforts along with societies in
development. State also provides financial assistance and guidance to spread the system of
co-operation in all walks of life.
2. OBJECTIVES OF STUDY:

The Objective of the study of Co-operative Banking is to know the origin of Co-
operative Banks.
1. To know the role of Virudhunagar District Central Co-operative banks.
2. To know the importance of Co-operative Banks.
3. To know the types of Co-operative Banks.
4. To know the Development of Co-operative Banks.
5. To study the profile of the members of the societies.
6. To offer suggestions based on the findings of the study.
 2. SCOPE OF THE STUDY:
In the present scenario major economical and technical changes are undergoing in
industrial and financial revolution through the new information-processing technology.
Especially in finance sector it has a significant role for overall development. After identifying
the subject (research area) and referring the relevant literatures, it has been found that in most
of the literature, the information technologies have a wide application area. However, in
finance sector major changes have been made. Due to these drastic changes we have chosen
to do the study on cooperative bank system. After completing step by step procedure for
automation process, now it is required to take the review of the system.
People used information technological tools to manage and process the
information. Atomization process use in the financial sector for transaction system. This type
of working methodology is used in the financial Institute since long years. The Urban Co-
operative bank sector is mostly related to all classes of people like businessmen, industry,
agriculture, labor, small entrepreneurs, workers etc. It has been changing complete culture
and working methodology. Therefore, it has a wide scope to study the existing modern
transaction system in the financial sector mainly in urban cooperative bank system.. In the
literature survey it has been found that the software engineering technology has monopoly for
the development of software product and it is observed that such technology is not used for
study purpose in any other different field. So why not this technology be tested on the
external field application intentionally for this study. It requires framework, structure, plan
and controlling parameters for research field. Such type of theory and planning is available in
the software engineering subject.