The origin of cooperative banks can be traced to a small town in South India, called Conjivaram, where in 1904, the Conjivaram Urban Cooperative Bank was set up, to cater to the needs of small businessmen as an alternative to moneylenders. Little attention had been paid to the development of the urban credit movement until the Maclagan Committee (1914) drew attention to its potentials.
Interestingly, a banking crisis in India in 1913-14, when no fewer than 57 joint stock banks collapsed, led to a flight of deposits from joint stock banks to urban cooperative banks.