ABSTRACT
Credit cooperatives had their origin in Europe in the nineteenth century. Their success prompted many countries, including India and the USA, to legalize credit cooperatives in the early part of the twentieth century. While in many countries credit cooperatives have evolved from infancy to maturity, in India they are still in a state of transition. Compared to their peers in the USA and Europe, India credit cooperatives have not been able to scale up their business. Most of the credit cooperatives are quite small in size compared to the domestic commercial banks. In fact the only segment to bear some semblance to a commercial bank, is the apex cooperative bank at the state level. The apex banks, otherwise known as the state cooperative banks (SCBs) essentially are federations of credit cooperatives. A federation of cooperatives in India was for the first time recognized by the Indian Cooperative Act, 1912. However, such federations were given recognition only at the district level. Subsequently, the Maclagan Committee (GoI, 1915) prescribed the prevalent three-tier structure for cooperatives, with the state cooperative bank at the apex in each state.
