ABSTRACT
Globally, the cooperative sector is making impressive strides. A survey of the 300 largest cooperatives in the world revealed their combined business turnover to be US$963 billion in 2004 – equivalent to the GDP of Canada, the world’s ninth largest economy (Garry, 2007). In terms of market share the cooperative banks are also playing a major role in the banking space in the advanced and emerging economies. Cooperative banks’ share of the total banking sector increased from 9 per cent in the mid-1990s to 14 per cent in 2004, for 29 major advanced and emerging economies that are members of the OECD (Hesse and Chihak, 2006). Cooperatives in India span a wide range of socio-economic activities. India is among the 28 nations in the International Cooperative Alliance (ICA) survey where the cooperative movement is between 50 and 100 years old (ICA, 2007). Notwithstanding this long tradition, cooperatives in India have not yet attained the mature stage in the evolutionary development path. Nor do cooperatives in India feature in the top hundred rankings of the ICA survey. Indian credit cooperative banks also fare poorly compared to their commercial peers. Compared to the total proportion of commercial banks’ non-performing assets of 3.3 per cent in India in 2006, credit cooperatives reported arrears of more than 30 per cent, depicting a poor financial performance.1
