What happened: Ministry of Cooperation expands cooperative banks’ insurance distribution role through Corporate Agents

The Ministry of Cooperation is promoting a wider role for cooperative banks beyond traditional lending and savings. In a Lok Sabha written reply, Union Home Minister and Minister of Cooperation Amit Shah said that the Ministry has undertaken initiatives to enable cooperative banks to carry out banking and allied financial activities “at par with commercial banks,” including acting as Corporate Agents for the distribution of insurance products (corporate agents are authorised intermediaries that distribute insurance products on behalf of insurers).

The Ministry of Cooperation-linked initiatives are aimed at:

diversifying cooperative banks’ business portfolios.strengthening cooperative banks’ financial viability and competitiveness.enhancing fee-based income (income from services, not only interest).promoting financial inclusion.

The Lok Sabha reply also connects these efforts to expanding access to and availability of quality banking and insurance services through the cooperative banking network, particularly in rural, semi-urban, and underserved areas.

Background and earlier position: cooperative sector deepening under Sahakar-se-Samriddhi

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