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Commercial Banks are in any of the following categories :
Owned by Govt of India ( All Nationalized Banks and state Bank group)
Private Banks ( HDBF bank, United Western bank)
Foreign Banks.
The shareholders of these bank get voting right in proportion to the holding. Shares are listed if offered to the Public.
Co-op Banks are run on co-op erative principles. Each member has a single vote irrespective of his holding in the capital of the Bank. He can withdraw his membership by surrendering shares to the Bank.
Co-op Banks are considered risky for following reasons :
Most of the co-op banks are weak in terms of its net worth and size of business,
Banks are run by politicians and have presence in local areas
While liberalization has given rights to these banks for deciding interest rates, exposure limits to its borrowers,
they do not have skill set to manage in the changing environment.
Of 2039 odd banks only 51 banks are accorded scheduled status by RBI based on certain norms and level of deposits. Of these 541 Banks very few banks have deposit base above 1000 crore.
Saraswat Bank is the only bank which despite in the Co-op sector has been performing well. Its free reserves are
265 crores. It has crossed deposits of Rs.3500 crores and has advances of Rs.2000 crores.
IT has posted Rs.26 crore net profit and has capital adequacy of 13.28% well above 8% stipulated by RBI.
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