Maharashtra government has decided to insure thousands of cooperative societies against financial uncertainties, reports Hindu.
According to an estimate, district cooperative banks hold around Rs 25,000 crore in deposits, while other cooperatives have much more at stake financially. Most of them are facing a credit crunch.
Maharashtra government had recently asked all cooperative societies, except those related to housing, to contribute 20% of their profits towards ‘public purposes’ and help strengthen smaller societies.
Insuring cooperatives–mostly district cooperatives and those related to the farming sector — against financial calamities will fortify up to15,000 organizations at the district and urban level, Maharashtra cooperative minister has said.
As housing societies are under law required to park their Reserve Funds Repair Funds and Sinking Funds in Cooperative Banks only, insuring these investments against bank frauds is a much higher Priority.