The Co-operative Central Bank Ltd (CCB) was established in 1937 under the Co-operative Societies Laws and Rules having as its main purpose the provision of banking and other ancillary services to member co-operative societies which form the backbone of the agricultural community of Cyprus. Over the years the Bank has seen the need to expand and diversify its activities and is now in a position to provide the full range of services normally offered by comprehensive rural banks. The establishment of the Bank was a major event and turning point in the development of the Co-operative Movement and has proved instrumental in eradicating the then prevalent usury and exploitation of farmers. Its progress has been rapid and its success beyond the expectation of the pioneers of the Co-operative Movement.
By supporting existing as well as newly established Co-operative Societies the Bank has also contributed towards the idea of thrift. The numbers of members of the Co-operative Credit Societies increased steadily and the pioneers of thrift prevailed so that today the Cyprus Co-operative Movement provides an excellent example of attaining self-finance through the collection of rural savings. Virtually every village in the Government controlled area of Cyprus has its own Co-operative Society. The idea of attaining self-finance through thrift gradually found its way into towns and to the relatively more prosperous classes of the population. The progress made by the Bank provides an excellent example of what can be achieved by self-help and mutual-help.
Shareholding and Administration
The Bank’s shareholders are solely Co-operative Societies registered under the Co-operative Societies Laws and Rules. At present its membership consists of 428 Credit Societies and Savings Banks, 365 active and 63 non-active due to the turkish occupation, and 62 non-credit Co-operative Societies, totaling 490 societies.
The Bank is controlled by the General Meeting of the member-societies who exercise their voting rights on the basis of “one member one vote” and attend to all matters of business in conformity with the Bank’s Bye –Laws . It is administered by a seven member Board elected at a special general meeting from among the representatives of the member societies for terms of three years’ duration. The Board appoints the General Manager whose powers and duties are as prescribed by the Law and the Bank’s Bye-Laws. The General Manager, assisted by the senior management, oversees the operations and reports to the Board on a regular basis. The Annual General Meeting of members is the supreme governing body of the Bank.
The CCB, is the apex organisation of the Co-operative Movement. It is a non-profit motivated organisation and its sole purpose is to serve its members meeting their needs the best way possible. It acts as a “lender of last resort” for the member co-operatives in need. Liquidity borrowing from CCB is infrequent and even then of a seasonal short-term nature. As a result, the vast majority of deposit taking co-operatives are net lenders to the Bank on a more or less continual basis. It follows that through the extensive network of co-operatives, the co-operative banking system is able to amass ample resources of which an appreciable part percolates through to the Bank in a stabilised pattern thus rendering it possible for it to finance its lending programme while ensuring that its own liquidity position is kept at a reasonably comfortable level.
The Bank’s contribution to the island’s economic growth and development should not be measured solely in terms of its funds raising activities and the provision of adequate credit to the Co-operative Movement. Because of its position, it has assumed a wider role than that of co-ordinating cash and credit flows. The Bank brings to their attention current economic problems, pinpoints special conditions existing in the Money Market and enlightens them on current business trends in the Co-operative Movements of other countries. Policies and practices followed by the rival commercial banks are the subject of regular deliberations aimed at preserving the Movement’s competitive edge and market share which accounted for around 32% of the deposits in local currency.
CCB also enjoys clearing house privileges as a member of the Cyprus Clearing House (CCH) which is operated at the Central Bank of Cyprus. At the CCH the Bank is authorised to act as the Clearing agent of its member Co-operative Credit Societies.
The Bank's Role in the Fight against Extreme Poverty
The Cyprus Co-operative Movement, in the context of its mission, plays an important, albeit, indirect role in the efforts aimed at fighting extreme poverty. The eradication of poverty has always been of particular concern to the Co-operative Movement which through the Co-operative Central Bank (CCB) and the Co-operative Credit Societies (CCS) operating in small villages as well as in all main towns, is responsible for around 32% of deposits in Cyprus.
CCB and its member Co-operative Credit Societies, given their mission and nature of activities, give priority and devote their resources to their main objective of serving the needs of their members. Over the years by pursuing these objectives they have succeeded in:
Improving the economic, social and cultural position of persons of limited resources and opportunities.
Enhancing the availability of resources by the encouragement of thrift, by eliminating usury and by the sound use of credit.
Promoting fuller utilisation of resources e.g. in the implementation of systems of agrarian reform and of land settlement aimed at bringing new areas into productive use and in the promotion of the processing of local raw materials.
Helping to raise the level of general and technical knowledge of their members and of persons associated with the Co-operative Movement.
The CCB and its member Co-operative Credit Societies are acknowledged as the principal organ for the implementation of numerous governmental credit schemes. They have in place efficient mechanisms for the channelling of loans and their timely disbursement to the recipients. For many years the Cyprus Government has utilised the CCB’s establishment as a vehicle for the channelling of Government funds and/or subsidies through the co-operative societies, to the thousands of displaced farmers as well as for financing underprivileged communities and emergency or development programmes in farming.
Over the years these concerted efforts have been extremely successful and co-operative banking institutions have proved instrumental in eradicating usury and exploitation and helped to build self-reliance and economic growth amongst the less privileged segments of the island’s population. In Cyprus extreme poverty as such has long since ceased to exist as a noticeable social or economic problem.
CCB, registered under the Co-operative Societies Laws and Rules, is at the same time a “bank” for the purposes of the Central Bank of Cyprus Laws 2002 and of the General Banking Laws of 1997-2004 and is recognised and regulated by the Central Bank of Cyprus. It has been authorised to deal as a foreign exchange dealer and is under the supervision of the Central Bank as all licensed Banking Institutions in Cyprus. In carrying out its functions it has to comply with the Rules and Regulations of the Central Bank of Cyprus to which it is answerable on matters concerning liquidity, lending policies, interest rates and other banking activities. As all banking institutions it has to submit to the Central Bank of Cyprus periodic statements and reports.
At the same time Co-operative Central Bank is supervised by Co-operative Supervisory Authority. For further information on the Co-operative Supervisory Authority please refer to its site at the following URL: www.cssda.gov.cy
The external audit of the bank's financial statements is done jointly by Ernst
&
Young and KPMG.
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