Apex Co-operative Bank: objectives, functions and management

Explain the objectives, functions and management of Apex Co-operative Bank.

Contents

State Co-operative Banks

There is a State Co-operative Bank in each state of our country. This bank is apex institution in the co-operative credit institutions of the State. This bank is also called as Apex Bank. It is the third and upper-most tier in the rural co-operative credit structure. Its share capital is sold to central co operative banks and other individuals. Its membership is confined to the following:

(i) Central co-operative banks. (ii) Primary co-operative credit societies.

Scholars of Economics and Co-operation can also be active member of it.

Functions and Objectives of State Co-operative Banks

Following are the functions and objectives of State Co-operative Banks:

Functioning as financial link between the Reserve Bank of India and District Co-operative Banks.
Providing money to Central Co-operative Banks of the State.
Establishing control over Central Co-operative Banks.
Guiding to Central Co-operative Banks.
Providing loan at concessional rate of interest to primary credit societies and Central Co-operative societies.

Management and Operation Area of State Co-operative Bank

Following two are the main constituents of State Co-operative Bank:

(a) General Body – In this body representative of the Bank’s members are nominated. This Body determines economic policies. Executive Board and other office bearers are appointed by this Body. Upper most power of State Co operative Bank is vested in General Body.

(b) Executive Board Executive Board is constituted with the same – representatives of the General Body. Economic policies of the General Body are implemented through it. Executive Board appoints employees, office bearers, specialists etc.

The functions of State Co-operative Bank are confined to the State in which they are located. Its head office is located in the capital of State. This bank can also open his branches in case of large state.

Financial Resources of State Co-operative Banks

Following are the financial resources of State Co-operative Bank:

(a) Share Capital – State Co-operative Bank issues share capital. State Government, central co-operative banks, primary credit societies can invest their fund with State Co-operative Bank.

1. Funds of Bank- State Co-operative Bank prepares reserve fund with its additional profits.

2. Deposits of its Members- State Co-operative Bank also provides banking facilities to its members, they accept deposits.

(b) External Resources- Following are the external financial resources of State Co-operative Bank.

1. Deposits from Non-Members – State Co-operative Bank also provides account facility to non-members. These deposits are significance in financing State Co-operative Bank.

2. Loan from Financial Institutions – State Co-operative Bank can take loan from the State Government, S. B. I, R. B. I and other financial institutions.