In a significant move to enhance liquidity management in the cooperative credit sector, the Maharashtra Government has formally approved the inclusion of investments made by Urban and Rural Non-Agricultural Cooperative Credit Societies in the bonds issued by the Maharashtra State Cooperative Bank (MSCB) as part of their Statutory Liquidity Ratio (SLR) compliance.
According to a circular issued by the Cooperation Commissioner and Registrar of Cooperative Societies, Maharashtra, the decision was taken under Section 157 of the Maharashtra Cooperative Societies Act, 1960, which empowers the state government to exempt or provide special permissions to cooperative institutions in the interest of the sector.
As per the directive, cooperative credit societies are required to invest a minimum of 25% of their total deposits to maintain statutory liquidity. Out of this, up to 5% investment in MSC Bank’s long-term bonds will now be treated as valid for SLR purposes.
The approval comes after detailed consultation and evaluation of proposals submitted by the Cooperation Commissioner’s office and the assurance provided by MSC Bank regarding liquidity support.
The MSC Bank has committed that, in case of any liquidity crunch faced by the investing societies, it will extend soft loans up to the invested bond value at a reasonable interest rate. The Reserve Bank of India has already authorized MSC Bank to issue long-term bonds, strengthening the credibility of such instruments.
This development is expected to provide much-needed relief to cooperative credit societies, especially those operating in semi-urban and rural areas, by offering them a safe and government-backed avenue to park their funds while also fulfilling regulatory liquidity norms.
The government circular also references a previous guideline which mandates credit societies to invest in institutions such as MSC Bank, District Central Cooperative Banks, and “A” graded Urban Cooperative Banks for maintaining SLR.
Maharashtra Cooperation Secretary Manjusha Salvi, in the official notification, stated that this decision aligns with the financial interest of the cooperative sector and aims to support the stability and growth of non-agricultural cooperative credit societies across the state.
All Divisional and District Cooperative Officers have been instructed to disseminate this information to the concerned credit societies and federations within their jurisdiction, ensuring effective implementation of the directive.
