A cooperative bank is a financial institution that operates on the cooperative principles of its members. Unlike traditional banks that are owned by shareholders seeking profits, cooperative banks are owned and controlled by their members, who are also their customers. The primary objective of cooperative banks is to provide financial services to their members and support their economic well-being.

Here are some key features and characteristics of cooperative banks:

1. Ownership and Control: Cooperative banks are owned and controlled by their members, who are also the customers of the bank. Each member typically has one vote, regardless of the amount of money they have deposited or the shares they hold.

2. Democratic Management: Cooperative banks operate on the principle of democratic management. Members elect a board of directors to oversee the bank’s operations. The board is accountable to the members and is responsible for making strategic decisions.

3. Social Objectives: While profitability is essential, cooperative banks often have social objectives, such as promoting thrift, providing affordable credit, and supporting the economic development of their members and the community.

4. Limited Profit Motive: Unlike commercial banks, cooperative banks are not driven solely by profit motives. Their primary goal is to meet the financial needs of their members and provide services at reasonable costs.

5. Membership Criteria: Cooperative banks have specific membership criteria, and individuals or entities interested in becoming members usually need to meet certain eligibility requirements.

6. Local Focus: Many cooperative banks have a local or community focus, serving the financial needs of a specific geographic area or community. This can make them more attuned to the unique needs of their members.

7. Dual Role: Cooperative banks often play a dual role by providing both banking services and promoting financial education and awareness among their members.

8. Types of Cooperative Banks: Cooperative banks can be categorized into different types based on their membership and functions. For example, credit unions are a type of cooperative bank that primarily focuses on providing financial services to individual members.

It’s important to note that the specific regulations and characteristics of cooperative banks can vary from one country to another. They play a crucial role in fostering financial inclusion and supporting the economic well-being of their members and communities.