Cooperative banking

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"Cooperative bank" redirects here. For banks by this name, see Co-operative Bank.

A statue of cooperative pioneer Robert

Owenstands in front of the Manchester head office
of the UK's Co-operative Bank.
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V
T
E

Cooperative banking is retail and commercial banking organized on a cooperative basis.

Cooperative banking institutions take deposits and lend money in most parts of the world.
Cooperative banking, as discussed here, includes retail banking carried out by credit
unions, mutual savings banks, building societiesand cooperatives, as well as commercial
banking services provided by mutual organizations (such as cooperative federations) to
cooperative businesses.

Contents
[hide]

1 Institutions
o

1.1 Credit unions

1.2 Cooperative banks

1.3 Land development banks

1.4 Building societies

1.5 Others

1.6 International associations

2 By region
2.1 Canada

2.1.1 Quebec

2.2 United Kingdom

2.3 Continental Europe

2.4 United States

2.5 India

2.6 Israel

2.7 Cyprus

3 Microcredit and microfinance

4 List of cooperative banking institutions

5 See also

6 References

7 External links

Institutions[edit]
Credit unions[edit]
Main article: Credit union
Credit unions have the purpose of promoting thrift, providing credit at reasonable rates, and
providing other financial services to its members.[1] Its members are usually required to share
a common bond, such as locality, employer, religion or profession, and credit unions are usually
funded entirely by member deposits, and avoid outside borrowing. They are typically (though not
exclusively) the smaller form of cooperative banking institution. In some countries they are
restricted to providing only unsecured personal loans, whereas in others, they can provide
business loans to farmers, and mortgages.

Cooperative banks[edit]
Larger institutions are often called cooperative banks. Some are tightly integrated federations of
credit unions, though those member credit unions may not subscribe to all nine of the strict
principles of the World Council of Credit Unions (WOCCU).
Like credit unions, cooperative banks are owned by their customers and follow the cooperative
principle of one person, one vote. Unlike credit unions, however, cooperative banks are often
regulated under both banking and cooperative legislation. They provide services such as savings

and loans to non-members as well as to members, and some participate in the wholesale
markets for bonds, money and even equities.[2] Many cooperative banks are traded on
public stock markets, with the result that they are partly owned by non-members. Member control
is diluted by these outside stakes, so they may be regarded as semi-cooperative.
Cooperative banking systems are also usually more integrated than credit union systems. Local
branches of cooperative banks select their own boards of directors and manage their own
operations, but most strategic decisions require approval from a central office. Credit unions
usually retain strategic decision-making at a local level, though they share back-office functions,
such as access to the global payments system, by federating.
Some cooperative banks are criticized for diluting their cooperative principles. Principles 2-4 of
the "Statement on the Co-operative Identity" can be interpreted to require that members must
control both the governance systems and capital of their cooperatives. A cooperative bank that
raises capital on public stock markets creates a second class of shareholders who compete with
the members for control. In some circumstances, the members may lose control. This effectively
means that the bank ceases to be a cooperative. Accepting deposits from non-members may
also lead to a dilution of member control.

Land development banks[edit]

The special banks providing Long Term Loans are called Land Development Banks, in the short,
LDB. The history of LDB is quite old. The first LDB was started at Jhang inPunjab in 1920. This
bank is also bassed on Co-operative. The main objective of the LDBs are to promote the
development of land, agriculture and increase the agricultural production. The LDBs provide
long-term finance to members directly through their branches.[3]

Building societies[edit]
Main article: Building society
Building societies exist in Britain, Ireland and several Commonwealth countries. They are similar
to credit unions in organisation, though few enforce a common bond. However, rather than
promoting thrift and offering unsecured and business loans, their purpose is to provide home
mortgages for members. Borrowers and depositors are society members, setting policy and
appointing directors on a one-member, one-vote basis. Building societies often provide other
retail banking services, such as current accounts, credit cards and personal loans. In the United
Kingdom, regulations permit up to half of their lending to be funded by debt to non-members,
allowing societies to access wholesale bond and money markets to fund mortgages. The world's
largest building society is Britain's Nationwide Building Society.

Others[edit]
Mutual savings banks and mutual savings and loan associations were very common in the 19th
and 20th centuries, but declined in number and market share in the late 20th century, becoming
globally less significant than cooperative banks, building societies and credit unions.
Trustee savings banks are similar to other savings banks, but they are not cooperatives, as they
are controlled by trustees, rather than their depositors.

International associations[edit]
The most important international associations of cooperative banks, which is based in Paris, is
the International Cooperative Banking Association (ICBA), which has member institutions from
around the world, and the Brussels based European Association of Co-operative Banks.

By region[edit]
Canada[edit]
In Canada, cooperative banking is provided by credit unions (caisses populaires in French). As of
September 30, 2012, there were 357 credit unions and caisses populairesaffiliated with Credit

Union Central of Canada. They operated 1,761 branches across the country with 5.3 million
members and $149.7 billion in assets.[4]

Quebec[edit]
The caisse populaire movement started by Alphonse Desjardins in Quebec, Canada, pioneered
credit unions. Desjardins opened the first credit union in North America in 1900, from his home
in Lvis, Quebec, marking the beginning of the Mouvement Desjardins. He was interested in
bringing financial protection to working people.

United Kingdom[edit]
British building societies developed into general-purpose savings and banking institutions with
one member, one vote ownership and can be seen as a form of financial cooperative (although
many de-mutualised into conventionally owned banks in the 1980s and 1990s). The UK Cooperative Group includes both an insurance provider, The Co-operative Insurance, and The Cooperative Bank, both noted for promoting ethical investment.

Continental Europe[edit]
Important continental cooperative banking systems include the Crdit Agricole, Crdit
Mutuel, Banque Populaire and Caisse d'pargne in France, Rabobank in the
Netherlands,BVR/DZ Bank in Germany, Banco Popolare, UBI Banca and Banca Popolare di
Milano in Italy, Migros and Coop Bank in Switzerland, and the Raiffeisen system in several
countries in central and eastern Europe. The cooperative banks that are members of
the European Association of Co-operative Banks have 130 million customers, 4 trillion euros in
assets, and 17% of Europe's deposits. The International Confederation of Cooperative Banks
(CIBP) is the oldest association of cooperative banks at international level.
In Scandinavia, there is a clear distinction between mutual savings banks (Sparbank) and
true credit unions (Andelsbank).

United States[edit]

This section requires expansion.

(July 2011)
Credit unions in the United States had 96.3 million members in 2013 and assets of $1.06 trillion.
[5][6]

India[edit]
Cooperative banks serve an important role in the Indian economy, especially in rural areas. In
urban areas, they mainly serve small industry and self-employed workers. They are registered
under the Cooperative Societies Act, 1912. They are regulated by the Reserve Bank of
India under the Banking Regulation Act, 1949 and Banking Laws (Application to Co-operative
Societies) Act, 1965.[7] Anyonya Sahakari Mandali, established in 1889 in the province of Baroda,
is the earliest known cooperative credit union in India.[8]

Israel[edit]
Ofek (Hebrew: )is a cooperative initiative founded in mid-2012 that intended to establish the
first cooperative bank in Israel.[9]

Cyprus[edit]
The Co-operative Central Bank Ltd (CCB)[10] was established in 1937 under the Co-operative
Societies Laws and Rules having as its main purpose the provision of banking and other ancillary
services to member co-operative societies which form the backbone of the agricultural
community of Cyprus. Over the years the Bank has seen the need to expand and diversify its
activities and is now in a position to provide the full range of services normally offered by
comprehensive rural banks. The establishment of the Bank was a major event and turning point

in the development of the Co-operative Movement and has proved instrumental in eradicating
the then prevalent usury and exploitation of farmers. Its progress has been rapid and its success
beyond the expectation of the pioneers of the Co-operative Movement. In mid 2013, Cyprus Cooperative banking system announced a major restructuring, where a list of 18 companies would
be created by merging the existing 93 Cooperative Banks. [11]

Microcredit and microfinance[edit]

The more recent phenomena of microcredit and microfinance are often based on a cooperative
model. These focus on small business lending. In 2006, Muhammad Yunus, founder of
the Grameen Bank in Bangladesh, won the Nobel Peace Prize for his ideas regarding
development and his pursuit of the microcredit concept.

List of cooperative banking institutions[edit]

Cooperative banking institutions

Na
me

Co
un
try

Me
mb
ers
(20
10)
[12]

Crdit
Franc
Agric
e
ole

DZ
Bank

Germ 17,70[1
0,000
any
4]

Ass
ets
(20
10
US
$
mil
lion
s)[12]

Ty
pe

[13]

Joint
stock
bank

CASA

Majority owned
by federation of
credit unions

Bank

Deutsche
Zentralgen
ossenschaft
bank
German
Central
Cooperativ
e Bank

Owned by three
quarters of
all Volksbank and
Raiffeisenbank (co
operative banks)
in Germany and
Austria

Alternat
ive
name

Notes

Cooperative banking institutions

Na
me

Co
un
try

Me
mb
ers
(20
10)
[12]

Ass
ets
(20
10
US
$
mil
lion
s)[12]

Ty
pe

Caisse
Franc
d'Epar
e
gne

Alternat
ive
name

literally
savings
bank

Rabob Nethe 1,500,

ank
rlands 000+
Natio
nwide
Buildi
UK
ng
Societ
y

Notes

Credit union
federation

Credit union
federation

Build
ing
societ
y

World's largest
building society

Group
e
Banqu Franc 3,400,
e
e
000
Popul
aire
Desjar Cana
dins

5,795,

Credi
t

Leading bank in

Cooperative banking institutions

Na
me

Co
un
try

Ass
ets
(20
10
US
$
mil
lion
s)[12]

Me
mb
ers
(20
10)
[12]

Group da

Raiffe
isen
Austr
Zentra ia
lbank

277

[15]

Ty
pe

Alternat
ive
name

union
feder
ation

Bank

Notes

Quebec

RZB
sterreich

Credit union
federation

Progoti
Bank

The largest Land

Development
Bank inBanglades
h

Progot
i Cooperat
ive
Land
Bangl
Devel
adesh
opme
nt
Bank
Limite
d

Bank

Nong
hyup

Banki National
Approx US$230
ng
Agricultura billion in loans

South
Korea

Cooperative banking institutions

Na
me

Co
un
try

Me
mb
ers
(20
10)
[12]

Iccrea
Italy
Banca

Cassa Italy
Centra
le
Banca
Credit
o
Coope
rativo
del

Ass
ets
(20
10
US
$
mil
lion
s)[12]

Ty
pe

Alternat
ive
name

divisi
on of
agric
ultura
l
coope
rative

l
Cooperativ
e
Federation
(NACF)

Bank

Istituto
Centrale
del Credito
Cooperativ
o

Bank

CCB

Notes

Cooperative banking institutions

Na
me

Co
un
try

Me
mb
ers
(20
10)
[12]

Ass
ets
(20
10
US
$
mil
lion
s)[12]

Ty
pe

Alternat
ive
name

Bank

Cassa
Centrale
Raiffeisen
dell'Alto
Adige

Notes

Nord
Est
Raiffe
isen
Lande
Italy
sbank
Sdtir
ol
Raiffe
isen
Switz
(Switz erlan
erland d
)
Banco
Coope
rativo
Espa Spain
ol and
Caja
Rural

Credit union
federation

Cooperative banking institutions

Na
me

Co
un
try

Me
mb
ers
(20
10)
[12]

Ass
ets
(20
10
US
$
mil
lion
s)[12]

Ty
pe

Alternat
ive
name

Notes

OPPohjol
a
Group Finla
and
nd
Pohjol
a
Bank

31% share of
Finnish credit
market, and 32%
share of savings
and deposit
market[16]

bank
mecu

Australia's first
customer owned
bank

Austr 125,0
alia
00+

Bank
Mala
Persat
ysia
uan

Bank Mala
Rakya ysia
t

46,13
5

$3b

bank

86,375
,542.9 Bank
7

Koperasi
Bank
Persatuan
Malaysia
Berhad

Islam
ic
coope
rative

Bank
Kerjasama
Rakyat
Malaysia

2nd national
cooperative bank
in Malaysia

Cooperative banking institutions

Na
me

Co
un
try

Me
mb
ers
(20
10)
[12]

Ass
ets
(20
10
US
$
mil
lion
s)[12]

Ty
pe

Alternat
ive
name

bank

Berhad

Cooperat
UK
ive
Bank

Not
applic
able[17]

Navy
Feder
al
US
Credit
Union

Credi
3,004,
33012 t
352
union

Share
d
Intere
st

UK

[18]

[19]

Bank

Coop
erativ
e
lendi
ng
societ
y

Notes

Subsidiary of
consumer
cooperative

Finance for fair

trade

Cooperative banking institutions

Na
me

Me
mb
ers
(20
10)

Co
un
try

[12]

GLS
Bank

Ass
ets
(20
10
US
$
mil
lion
s)[12]

Ty
pe

Alternat
ive
name

Notes

Germ
any

The
New
Coope
120,0
Zeala
rative
00+
nd
Bank

Bank

Customer owned
bank

Alter
native ABS
bank

sustainable and
ethic banking

Banco
Arge
Credic
ntina
oop
Altern
ative Switz
Bank erlan 4,864
Schwe d
iz[20]

See also[edit]
Cooperatives portal

Building society

Credit union

Savings and loan association

Mutual savings bank