Cooperative Banks — The Three-Tier Structure

Cooperative banks are financial institutions organised on cooperative principles — owned and run by their own members, mainly to serve the credit needs of agriculture, small trade and small-scale industry, particularly in rural areas. India's rural cooperative credit structure is organised in three tiers, corresponding to the village, district, and state levels:

1. Primary Agricultural Credit Societies (PACS) — the base-level cooperative society, formed at the village level, providing short-term and medium-term crop loans directly to farmer-members.
2. District Central Cooperative Banks (DCCBs) — one for each district, refinancing and supervising the PACS within that district, and providing them with the funds and technical support they cannot generate on their own.
3. State Cooperative Banks (SCBs / Apex Banks) — the apex cooperative bank for each state, which coordinates and finances the DCCBs, and is itself linked to NABARD for refinancing.

Alongside this rural structure, Urban Cooperative Banks (UCBs) serve the credit needs of small traders, artisans and salaried individuals in towns and cities, operating under joint regulation by the RBI (banking functions) and the Registrar of Cooperative Societies (cooperative-society functions). …