Question

How does ownership profile differ in the commercial banks vis-a-vis the cooperative banks.

Answer 1

Commercial banks and cooperative banks differ in their functions as well as in their ownership profile. Commercial banks are owned by shareholders whereas cooperative banks are owned by the members of cooperative societies.

Commercial bank is formed for the commercial purpose such as accepting deposits and lending money to public. Hence its objective is to earn profit. On the other hand, cooperative banks are owned and operated by the members of the cooperative societies formed for a common purpose. Their main aim is to provide financial service at modest interest rate to the common man for agriculture or small scale business. Commercial banks are regulated by the central bank of the country whereas cooperative banks are regulated by the central banks and by the act for cooperative societies.