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[Music] commercial banks are governed by indian banking regulations act 1949 cooperative banks are the banks whose main objective is to provide financial assistance to economically weaker sections of the society such banks are registered under the cooperative societies act there are three types of cooperative banks first primary credit societies these institutions are formed at village level on town level the operations of such banks are limited to a very small area second district central cooperative banks these banks operate at the district level they act as a link between primary credit societies and state cooperative banks third state cooperative banks state cooperative banks are biggest form of cooperative banks they operate at the state level the central bank of a country is the only institution allowed to create physical currency in other words coins and paper money in today's society however debt is also money the dollar you pay with when using your credit card has just as much purchasing power as a one dollar bill therefore as explained in the fractional reserve banking video commercial banks create money as well by issuing loans and since most of the money in existence is not physical commercial banks actually create more money than central banks most countries have one central bank and multiple commercial banks the central bank has a monopoly on physical money creation they can create as much physical currency as they deem necessary commercial banks however cannot do that some people have to deposit money and others have to request loans otherwise the money creation mechanism of a commercial bank stops working therefore maintaining stability is essential bank's main goal and it can do that by one managing interest rates lowering them to stimulate economic activity or increasing them if it thinks the economy is overheating 2. telling banks which rules they need to follow for example how much money they need to keep as reserves 3. acting as a lender of last resort and buying assets that nobody else wants during times of turbulence for example giving banks quick cash by buying the illiquid mortgage-backed securities they were stuck with after the great recession a central bank can have other goals as well such as full employment but its core responsibilities revolve around maintaining the stability of a country's financial system [Music] specialized these bands specialize in providing financial assistance to a particular industry or sector [Music] in providing financial assistance to small industries [Music] it stands for agriculture and rural development and specialized in providing financial support you