Commercial Banks- 

          A commercial bank is a monetary institution which serves the interest of its depositors by providing security to the deposits of money, and on the other hand, makes profits by investing such deposits in the productive measure by extending loans.

Co-operative Bank 

          The term 'Co-operative Bank' includes State Co-operative Bank Central Co-operative Bank and primary Co-operative Bank. Thus they work at 3 levels. The main function of the Central Co-operative Bank is to finance primary Cooperative Bank. They perform also banking functions. The Central Co-operative Bank receive their capitals from deposits, and from State Co-operative Bank or Reserve Bank by way of loan.

Difference between Co-operative Banks and Commercial Banks

          Commercial Bank

          Co-operative Bank


The commercial banks have been organized either as the joint stock company under the Companies Act 1956 or as the public corporation under separate Acts of Parliament.

Co-operative bank has been established under the  cooperative societies Acts of different states


The Commercial banks are organized on a unitary basis.

The State Co-operative Bank is the apex institution in the State, while Central/district Co-operative Bank function at the district level and the primary Credit societies work at the village level.


Every commercial bank which is a scheduled bank is entitled to avail of the reference facilities from the Reserve Bank.

Only the State Co-operative Bank has access to the Reserve Bank of India.


The commercial banks work over a wide area which is not limited by the boundaries of particular state or district.

The Co-operative Bank works within a given area.


Till 1969 the commercial banks where urban-oriented and financed organized trade and industry.

The Co-operative Bank have been basically rural-oriented and have a financing agricultural and allied activities


Commercial banks are governed by all the Sections of the Banking Regulation Act 1949.

The control of The Reserve Bank is partial over the Cooperative Banks. Only some of the Sections of Banking Regulation Act 1949 applicable to the Cooperative Banks.


The commercial banks proceed on sound business.

 The Co-operative Banks function on the principle of Co-operation


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