ABSTRACT
Credit cooperatives in India are more than a century old. They gained formal recognition with the enactment of the Cooperatives Act, 1904. Cooperative were primarily visualized as specialized agencies to meet the credit requirement of rural people in the country, particularly those engaged in agriculture. Village-level credit cooperatives providing shortterm credit were the first to be organized in the scheme of cooperatives. Subsequently, the Cooperative Act of 1912 recognized formation of federations of cooperatives. Accordingly, central cooperative banks were organized at the district level with the village-level PACS as their members. The central banks were supposed to act as a balancing centre for the base-level PACS. The central cooperative banks were also envisaged to be the link between the primary credit societies and the money market. Subsequently, in 1915 the Maclagan Committee recommended the formation of an apex cooperative institution at the state level namely the state cooperative banks (SCBs). The SCBs were supposed to discharge functions similar to those of central banks at the state level. The SCBs were mandated to play the lead role in the development of cooperatives in the states. Hence, by 1930, the short-term credit cooperatives in India had evolved to a three-tier structure with the villagelevel PACS forming the base, the district-level CCBs in the middle and the SCBs at the apex.
