Correct Option
The correct option is 1 only
Explanation
A cooperative society is a voluntary association of individuals who join together to protect or promote their common economic interests. It operates on the principle of self-help and mutual help, pooling resources to provide services or credit to its members at reasonable rates.
Statement-wise Analysis
- Statement 1 is Correct: Cooperative societies are a significant source of formal credit in rural India. They were established primarily to provide affordable credit to farmers and rural artisans, reducing their dependence on informal moneylenders who charge exorbitant interest rates.
- Statement 2 is Incorrect: The fundamental basis of a cooperative society is the pooling of resources. Members contribute capital and deposits into a common pool, which is then utilized to lend to members in need. They do not operate individually in isolation; rather, they function collectively to achieve economies of scale and mutual benefit.
- Statement 3 is Incorrect: Cooperative societies are not restricted solely to member deposits for funds. They can and do obtain loans from higher-tier cooperative banks (such as District Central Cooperative Banks or State Cooperative Banks) and commercial banks. Additionally, they receive refinancing support from institutions like NABARD to maintain liquidity and expand their lending capacity.
Key Takeaway
Key Takeaway: Cooperative societies function on the principle of collective resource pooling to provide affordable credit, serving as a crucial alternative to informal lending in rural economies. They are integrated into the formal banking structure and can access funds beyond just member deposits.