InvestorQ : How is profit allocated in a cooperative bank?
Niharika Kamble made post

How is profit allocated in a cooperative bank?

Answer
user profile image
1 year ago


A cooperative bank is a bank established on cooperative basis, i.e. it is an association of persons coming together voluntarily to provide banking solutions. Thus, there is shared ownership of the bank. This is why the question of allocation of profit in a cooperative bank is a pertinent one. In case of profits in a cooperative bank, a significant portion of the annual profits are used to build up reserves. Some part of this profit can be distributed to members of the cooperative. Most members get a part of the profit generated through dividend, in line with the number of shares they own.