Since inception the Indian Cooperative movement was initiated by the Government to align the rural credit system with the objectives of development planning. The RBI played an important role. The RBI’s concern and involvement in the sphere of rural credit stemmed from its very statute of incorporation.
Specific provisions were made in the Reserve Bank of India Act 1934 for the establishment of an Agricultural Credit Department and for extending refinance facilities to the cooperatives. RBI laid emphasis on strengthening and ensuring viable provincial cooperative bank, central cooperative banks, marketing societies and primary agricultural credit societies in each province for seasonal agricultural operations. Role of cooperatives 3.