District central cooperative banks in India: reorienting the middle tier in the cooperative ediﬁce of India
The Cooperative Act of 1904 gave formal recognition to village-level credit cooperative societies only. We observed in the previous chapter that inability to mobilize suﬃcient deposits to meet their working capital requirements has been one of the structural weaknesses of the PACS. Further, the registrar of cooperatives was responsible for orderly development of cooperatives in the provinces. Supervision of PACS by the registrar became a daunting task, given the surge in registration of village-level cooperatives after the promulgation of the Cooperative Act of 1904. As such, the need was felt for a structured supervisory mechanism to oversee the activities of the PACS. The Cooperative Act, 1912 recognized these shortcomings and, as such, permitted formation of federation of cooperatives at the district level. These federations of PACS were registered at the district level as ‘district central cooperative banks’, popularly known as ‘central cooperative banks’ (CCBs), or simply as central banks. The choice of ‘district’ for organizing the federation of PACS was guided by administrative considerations. The ‘district’ plays an important role in the administrative arrangement of the country, serving as the basic unit for resource allocation, revenue administration and maintenance of law and order in a state. The recommendation of the Sir Edward Maclagan Committee in 1915 to build a strong three-tier structure in every province gave further impetus to the formation of CCBs.