Co-operative banks are play very fateful role in the economy of India especially for people engaged in agricultural and agriculture-based operations. Despite efforts being made by RBI to transform this all-important sector of the Indian financial system, the call for change needs to come from the co-operative banks themselves. With the young generation increasingly becoming dependant on the virtual ease of working, the brick and mortar system of banking by co-operatives need to take a positive turn. While it is a supporting hand in the financial economy, commercial banks have been increasing their presence by providing a complete support. It can be easily inferred that although the business of these commercial bank is flourishing, the consumers cannot be totally relieved of the pain that they have been facing for so long. Co-operative banks, with their improved attitude relevant to the present scenarios, can be seen as a hope like the mirage of an oasis in the desert. The Indian Rural Sector has an agricultural dominance. The engagement of majority population in farming and related activities that are seasonal in nature, leads to their occupation giving them far less returns to complete their future requirements.These Banks also contribute the major part in the India’s banking and financial system. This paper will be present benefits and challenges of cooperative banks in India got much important in the Indian Economy growth and betterment of farmers and middle class families.

KEYWORDS:  Cooperative Banks, Rural and Urban Area, Benefits and Challenges.