Exercises · Q7
Q.Distinguish between the owned funds and the borrowed funds of a District Central Co-operative Bank.
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Start your 14-day free trial to unlock the full solution →The funds of a DCCB fall into two classes, which differ on several points:
| Basis | Owned funds | Borrowed funds |
|---|---|---|
| Meaning | The bank's own permanent capital | Resources owed to others and repayable |
| Made up of | Share capital (mainly from member societies), entrance fees, reserve fund and other reserves, undistributed profit | Deposits (from member societies, individuals and the public); borrowings and refinance from the State Co-operative Bank, NABARD and the RBI |
| Repayment | Not repayable to outsiders; form a permanent cushion | Repayable to depositors and lenders |
| Role | Give the bank strength and safety; win depositors' trust | Supply the bulk of the money the bank lends |
| Size | Relatively small but stable | Much larger; deposits and refinance are the main working funds |
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