Agricultural is the largest and most important sector of the Indian economy. The prosperity of people in India is very much inter-related with progress in her agriculture in view of predominantly agrarian character of the economy. It accounts for about 18 percent of GDP and still about two third of the working population depends upon this sector for their livelihood. Any change in agriculture production and productivity creates spill over effects on other sector and all over growth rate of the economy. Agriculture development depends upon a number of factors-favourable monsoons, available of irrigation, high yielding seeds credit etc. however the adequate and timely availability of credit is the crucial factor which augmenting agriculture production and productivity. In the colonial period the lack of institutional credit facilities persuaded the peasant to depend the money lender both for consumption and investment credit. The money lenders provided credit on the basis of the borrowing peasants. In most cases the money lenders giving loans was less than the actual value of mortgaged land. The beginning of the institutional finance for agriculture in India dates back to 1793, when the system of tactic loans was introduced. The seeds of the co-operation in India were sown in 1904 when the first cooperatives societies act was passed. It enabled formation of agricultural credit cooperative in villages in India under government sponsorship. There was no alternative to cooperative at village level for the provision of agricultural credit. The rural credit survey committee in 1954 has made the historical statement, “the co-operative have failed, but the co-operation must succeed”.