Global payments
Posted on Jul 31, 2025
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Key Takeaways from the blog:
A cooperative bank is managed and owned by a bunch of members for their mutual benefits.
The main aim of these cooperative banks is local growth, mutual decision-making, and support from the local community.
These cooperative banks focus on lower interest rates, a customer-centric approach, and affordable banking products.
Cooperative banks emphasise empowering local economies across rural and urban areas.
Have you ever wondered why some of the banks have that friendly, community vibe? It is almost like everyone knows or has heard about that bank. Have you ever noticed the term “cooperative banks” in front of any banks and thought about what makes them different?
In this blog, we will learn what cooperative banking is, why it matters in the Indian banking system, and how it connects people and different communities.
What is Cooperative Banking?
Cooperative banking means a financial system that is owned and controlled by the people who use its services, its members. These banks exist primarily to serve the shared interest of their members and the community, and to generate a shared value for all the participants of the banks, not just shareholders.
How do Cooperative banks work?
Different cooperative bank has different styles of ownership and voting patterns. Let's look at some of the structure:
Ownership structure: In this type of structure, the members of the bank are both the owners and the customers. The profit generated by the banks is either reinvested in the bank or divided among the members.
Democratic management: In this type of setting, every member of the bank has equal voting rights, emphasising transparency and inclusion.
Participation Membership: In this type of structure, the membership of the cooperative bank is open to all within a specified community.
Now, let look at the advantages and limitations of a cooperative bank.
Advantages of Cooperative Banks
Cooperative banks have several advantages compared to commercial banks. Let's have a look at the advantages of cooperative banks:
Barrier removal: Cooperative banks work as a barrier removal that excludes small businesses and other underserved people by bridging the gap.
Minimal Fees: As compared to large commercial banks, cooperative banks have minimal and lower fees.
Customised services: Cooperative banks focus more on a customer-centric approach, so their services are customised for their users.
Limitations of Cooperative Banks
Despite having advantages, there are a few disadvantages of cooperative banks. We have listed the major disadvantages below:
Lack of resources: Due to the limitations on the members and participants, cooperative banks can face the issue of resource limitations.
Legal barriers: Governments have set a few rules for these types of banks. This can sometimes limit the operational flexibility.
Administration issues: As these banks do not have a particular set of rules, mismanagement can arise if the processes are not properly imposed.
Source: Reddit
What is the role of cooperative banks in the modern financial system?
Cooperative banks play a very important role in removing the financial barriers in our country. Especially in the areas and communities where people have less access to the Indian banking system, cooperative banks play a major role. Agricultural sectors, small traders, and emerging entrepreneurs all play a very important role as members or participants in cooperative banks.
Cooperative Banks vs Commercial Banks
Here is a quick side-by-side comparison of a commercial bank and a cooperative bank:
Aspect | Header 2 | Header 3 |
|---|---|---|
Ownership | Members (customers) | Shareholders |
Main Goal | Mutual benefit, service-driven | Profit maximisation |
Decision Making | Democratic (one member, one vote) | Based on shareholding |
Customer Focus | Local communities, specific groups | Wide, often less personal |
Profit Distribution | Among members or reinvested | To shareholders as dividends |
International Payments and Cooperative Banks
As globalisation is increasing every day, cooperative banks have started recognising the need for an effective cross-border payment system. Originally, the cooperative banks have focused mainly on local needs, but with the growing economy and with the help of today’s digital platforms, cooperative banks are empowered to offer international transaction services to their users.
However, these banks still face many issues when it comes to receiving and sending out international payments. Problems like the ability to provide affordable fees, faster payouts, low FX margins, and the ability to comply with RBI and FEMA still exist with these cooperative banks.
InfinityApp: The best alternative for receiving international payments
When it comes to international transactions, traditional banks, cooperative banks, and other payment platforms like PayPal, Wise, etc. offer the service of receiving international payments. But one factor that plays a major role in using these services is affordability.
Be it an emerging exporter, freelancer, or a startup founder, managing international payments can be a daunting process because of the fees that the traditional banks and other payment platforms (PayPal, Stripe, Wise) charge and the accessibility to these platforms.
This is where InfinityApp stands out.
InfinityApp helps you open a virtual multi-currency account in just 5 minutes. This means you can receive payments in up to 50+ currencies across the globe without any hassle.
Infinity offers the end-to-end service of receiving international payments at just 0.5%( INCLUSIVE OF ALL) with no other hidden charges. You receive the foreign payment in your virtual multi-currency account, convert it at the live FX rate (or hold the amount to convert it at your preferred FX rate), and then get it credited into your domestic bank account. That is it. Just 0.5% and you receive payments in USD, GBP, EUR, or any other currency around the globe.
On top of that, Infinity provides you with instant and free FIRA for every transaction, which helps you stay compliant with the RBI and FEMA regulations.
Unlike InfinityApp, other platforms charge from 2%-5%, or more per transaction. Apart from this, you are charged for GST, FX mark-ups, and many other hidden charges. This can eat into your profits and make the whole process of receiving international payments daunting.
So, what are you waiting for? Sign up with Infinity today and start growing your business seamlessly.
FAQs
What is a cooperative bank?
A cooperative bank is a banking system owned and managed by its participants and members of a community.
What services do cooperative banks provide?
Cooperative banks provide services like loans, deposits, and sometimes international transactions customised for the members.
Who can join a cooperative bank?
Membership in a cooperative bank depends on the community you belong to. Individuals who share a local, geographic, or professional community can become members.
