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In pre-independence India, the British Indian government reiterated the English model in the co-operative sector, and the Co-operative Credit Societies Act, 1904 was passed in India for the first time to reorganize the Indian co-operative society, based on Sir's recommendations. Frederick Nicholson and Sir Edward Law (1901). This move by the British Government of India addresses the issue of indebtedness in India and the resulting situation for farmers in the country. The Act encouraged the formation of credit unions across the country, which led to the formation of the first urban co-operative credit union in Tamil Nadu in October 1904. This was the first phase of the establishment of a co-operative banking system, and it was there. several errors in the Act have limited the achievement of the intended benefits of co-operatives across the country. The law allowed credit unions to register, but it did not make provision to protect non-credit organizations or state-owned enterprises. The government recognized these shortcomings, and to address them, a comprehensive law, known as the Cooperative Societies Act of 1912, was introduced. Approved the formation and organization of central Indian co-operatives and non-debtors. Even after enduring many hardships during that time, the union maintained a positive post-independence trend, and it became part of economic progress. India's First Five-Year Plan recognizes the importance of co-operatives in the implementation of development goals, with a focus on farmers and the poorest sections of society. To address the problem of rural debt and other financial concerns in the rural community, the Indian government established the All India Rural Credit Survey Committee. Indian Cooperatives Banks are regulated by the Reserve Bank of India and the National Bank for Agriculture and Rural Development (NABARD) under the Banking Regulation Act, 1949 and the Banking Act (Application for Cooperatives) Act, 1965, respectively. Basic co-operatives, central co-operatives, government co-operatives, and urban co-operatives are the four basic types of co-operative banks. The primary function of co-operative banks is to provide financial support for small and medium-sized small financial services. It collects funds from its members and distributes them.