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How Cooperative Societies are run in India?

mmdoot
by Mukesh Doot 3 year(s) ago

What makes the cooperative society a transparent option is the fact that it is run as per the law of the respective state in which it is operating. For example, all the co-operative societies in Maharashtra are governed by The Maharashtra Co-operative Societies Act, 1960 (MCS Act) and The Maharashtra Co-operative Societies Rules, 1961. To run a society, it has to be registered with the cooperative register of the respective state under the act.

However, there are cases when the cooperative society is operational beyond a state or have branches in several states in the country. In such a scenario, the society is governed by a Central Act viz. the Multi-State Co-operative Societies Act, 2002 and its Rules. Co-operative banks are also governed by the Reserve Bank of India under Banking Regulation Act, 1949 as amended by the Banking Laws (Application to Co-operative Societies) Act, 1965 and the Banking Regulation (Co-operative Societies) Rules, 1966.

So anyone or the group of people who want to start up a cooperative society has to take following steps which are in accordance with the laws –

  • First determine whether the operations of the cooperative society or cooperative bank will be confined to a particular state. (the society can be operational in a particular state and then beyond that state in an expansion plan. However, separate registrations have to be done)
  • Read carefully all the laws and the by-laws regarding registration of your cooperative entity.
  • Fulfill the criteria and then register the cooperative entity with the registrar.
  • Run the deposit, investment and loan schemes as per the rules specified in the applicable law.
  • Know where your cooperative bank can invest the funds and how it should be utilised.
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