The distinctive features of BCCs

As from the beginning, the BCCs operate based on the founding principles of cooperative credit – cooperation, solidarity and a local focus – contributing to the well-being of communities and the economic and cultural development of the surrounding regions through socially responsible action.

The BCCs are predominantly cooperative banks, based on the principles of the social motivation of profit, the centrality of the individual, solidarity, sustainability, participation, and collective action.

Specifically, the reform of cooperative credit maintained the special characteristics that distinguish BCCs from other banks:

• Lending predominantly to shareholders (more than 50% of loans to shareholders and/or risk-free activities).
• The disbursement of no less than 95% of the exposures (financing and loans and other risky activities) in the local area.
• The allocation of at least 70% of annual net profits to the legal reserve.
• The allocation of 3% of annual net profits to mutual funds for the promotion and development of cooperation.
• The allocation of the remaining profits – net of any revaluation of shares and of the portion allocated to other reserves or distributed to shareholders within the limits indicated below – for charitable or solidarity purposes.
• The allocation of profits to shareholders, but to an extent not exceeding the maximum interest rate of interest-bearing postal bonds plus two and a half points on the capital actually paid in.
• The non-distribution of the company's assets to the shareholders, neither during the company's life nor upon dissolution of the company.
• The principle of one member, one vote, regardless of the number of shares subscribed.
  
  
  

To offset the effects produced by the civil law regulations applicable only to cooperatives, tax legislation has established specific rules whereby BCCs may deduct 63% of their net profits from their business income in addition to the 3% donated to mutual funds for cooperation, and thus a total of 66% of profits, which in any case is a lower share than the mandatory allocation to reserves.

On the other hand, the minimum number of shareholders was increased from 200 to 500, and the maximum capital stake that each shareholder can hold from €50,000 to €100,000, as is the case for non-banking cooperation.

Learn more and read our articles su Cooperative Credit.​​