Cooperative bankingFrom Wikipedia, the free encyclopedia"Cooperative bank" redirects here. For banks by this name, seeCo-operative Bank.A statue of cooperative pioneerRobert Owenstands in front of theManchesterhead office of the UK'sCo-operative Bank.

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Cooperative bankingis retail and commercial banking organized on acooperativebasis. Cooperativebanking institutionstake deposits and lend money in most parts of the world.Cooperative banking, as discussed here, includes retail banking carried out bycredit unions,mutual savings banks,building societiesandcooperatives, as well as commercial banking services provided bymutual organizations(such ascooperative federations) to cooperative businesses.Contents[hide] 1Institutions 1.1Credit unions 1.2Cooperative banks 1.3Land development banks 1.4Building societies 1.5Others 1.6International associations 2By region 2.1Canada 2.1.1Quebec 2.2United Kingdom 2.3Continental Europe 2.4United States 2.5India 2.6Israel 2.7Cyprus 3Microcredit and microfinance 4List of cooperative banking institutions 5See also 6References 7External linksInstitutions[edit]Credit unions[edit]Main article:Credit unionCredit 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 acommon 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 calledcooperative 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 theWorld Council of Credit Unions(WOCCU).Like credit unions, cooperative banks are owned by their customers and follow thecooperative principleof 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 publicstock 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 specialbanksproviding Long Term Loans are calledLand Development Banks, in the short, LDB. The history of LDB is quite old. The first LDB was started at Jhang inPunjabin 1920. This bank is also bassed onCo-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 societyBuilding societies exist in Britain, Ireland and several Commonwealth countries. They are similar to credit unions in organisation, though few enforce acommon 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'sNationwide Building Society.Others[edit]Mutual savings banksand mutualsavings and loan associationswere 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 banksare 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 inParis, is the International Cooperative Banking Association (ICBA), which has member institutions from around the world, and theBrusselsbasedEuropean Association of Co-operative Banks.By region[edit]Canada[edit]In Canada, cooperative banking is provided by credit unions (caisses populairesin French). As of September 30, 2012, there were 357 credit unions andcaisses 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]Thecaisse populairemovement started byAlphonse DesjardinsinQuebec,Canada, pioneered credit unions. Desjardins opened the first credit union in North America in 1900, from his home inLvis, Quebec, marking the beginning of theMouvement Desjardins. He was interested in bringing financial protection to working people.United Kingdom[edit]Britishbuilding societiesdeveloped into general-purpose savings and banking institutions with one member, one vote ownership and can be seen as a form of financial cooperative (although manyde-mutualisedinto conventionally owned banks in the 1980s and 1990s). The UK Co-operative Group includes both aninsuranceprovider,The Co-operative Insurance, andThe Co-operative Bank, both noted for promotingethical investment.Continental Europe[edit]Important continental cooperative banking systems include theCrdit Agricole,Crdit Mutuel,Banque PopulaireandCaisse d'pargnein France,Rabobankin the Netherlands,BVR/DZ Bankin Germany,Banco Popolare,UBI BancaandBanca Popolare di Milanoin Italy,Migrosand Coop Bank in Switzerland, and theRaiffeisensystem in several countries in central and eastern Europe. The cooperative banks that are members of theEuropean Association of Co-operative Bankshave 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.InScandinavia, there is a clear distinction betweenmutual savings banks(Sparbank) and truecredit unions(Andelsbank).United States[edit]This section requiresexpansion.(July 2011)

Credit unions in the United Stateshad 96.3 million members in 2013 and assets of $1.06 trillion.[5][6]India[edit]Cooperative banks serve an important role in theIndian 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 theReserve Bank of Indiaunder theBanking Regulation Act, 1949and Banking Laws (Application to Co-operative Societies) Act, 1965.[7]Anyonya Sahakari Mandali, established in 1889 in the province ofBaroda, 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 Co-operative 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 ofmicrocreditandmicrofinanceare often based on a cooperative model. These focus onsmall businesslending. In 2006,Muhammad Yunus, founder of theGrameen Bankin Bangladesh, won theNobel Peace Prizefor his ideas regarding development and his pursuit of the microcredit concept.List of cooperative banking institutions[edit]Cooperative banking institutions

NameCountryMembers(2010)[12]Assets(2010 US$ millions)[12]TypeAlternative nameNotes

Crdit AgricoleFrance[13]Joint stock bankCASAMajority owned by federation of credit unions

DZ BankGermany17,700,000[14]BankDeutsche ZentralgenossenschaftbankGerman Central Cooperative BankOwned by three quarters of allVolksbankandRaiffeisenbank(cooperative banks) in Germany and Austria

Caisse d'EpargneFranceliterally savings bankCredit union federation

RabobankNetherlands1,500,000+Credit union federation

Nationwide Building SocietyUKBuilding societyWorld's largest building society

Groupe Banque PopulaireFrance3,400,000

Desjardins GroupCanada5,795,277[15]Credit union federationLeading bank in Quebec

Raiffeisen ZentralbankAustriaBankRZB sterreichCredit union federation

Progoti Co-operative Land Development Bank LimitedBangladeshBankProgoti BankThe largestLand Development BankinBangladesh

NonghyupSouth KoreaBanking division of agricultural cooperativeNational Agricultural Cooperative Federation (NACF)Approx US$230 billion in loans

Iccrea BancaItalyBankIstituto Centrale del Credito Cooperativo

Cassa Centrale Banca - Credito Cooperativo del Nord EstItalyBankCCB

Raiffeisen Landesbank SdtirolItalyBankCassa Centrale Raiffeisen dell'Alto Adige

Raiffeisen (Switzerland)SwitzerlandCredit union federation

Banco Cooperativo Espaol and Caja RuralSpain

OP-Pohjola Group and Pohjola BankFinland31% share of Finnish credit market, and 32% share of savings and deposit market[16]

bankmecuAustralia125,000+$3bbankAustralia's first customer owned bank

Bank PersatuanMalaysia46,13586,375,542.97BankKoperasi Bank Persatuan Malaysia Berhad2nd national cooperative bank in Malaysia

Bank RakyatMalaysiaIslamic cooperative bankBank Kerjasama Rakyat Malaysia Berhad

Co-operative BankUKNot applicable[17][18]BankSubsidiary of consumer cooperative

Navy Federal Credit UnionUS3,004,35233012Credit union

Shared InterestUK[19]Cooperative lending societyFinance forfair trade

GLS BankGermany

The Cooperative BankNew Zealand120,000+BankCustomer owned bank

Banco CredicoopArgentina

Alternative Bank Schweiz[20]Switzerland4,864Alternative bankABSsustainable and ethic banking

See also[edit]Cooperatives portal

Building society Credit union Savings and loan association Mutual savings bank