Economics • Banking & FinanceMedium
How do cooperative banks in Uttarakhand differ structurally from commercial scheduled banks in their governance and regulatory framework?
A. Cooperative banks are owned by their borrowing and non-borrowing members on a democratic principle and are regulated dually by state cooperative departments and the Reserve Bank of India✓ Correct Answer
B. Cooperative banks operate strictly as foreign multinational corporations listed on international stock exchanges
C. Cooperative banks are exempt from all forms of central banking regulations and statutory liquidity requirements
D. Cooperative banks provide credit exclusively to central government ministries
💡 Solution & Explanation
Cooperative banks operate on cooperative principles of member ownership and democratic control, subject to dual regulation under state cooperative societies acts and the Banking Regulation Act as amended for cooperative banks. Commercial banks are incorporated under the Companies Act or Banking Companies Act. Amendments empowering RBI over cooperative banks enhanced depositor protection across urban and rural cooperative banks.
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