Maharashtra’s Department of Cooperation is planning a scheme to insure deposits in cooperative credit societies through private insurance companies, with four leading insurers showing preliminary interest.
Unlike bank deposits, which are insured up to Rs 5 lakh via DICGC, cooperative society depositors currently have no protection, leaving them vulnerable to losses when societies fail. Protecting these depositors has become a key issue in the cooperative sector.
Earlier, a state-backed insurance corporation was proposed, but many societies opposed contributing premiums, and the plan was stalled. The new approach shifts responsibility to private insurers. Two options are being considered: societies create a dedicated insurance fund, or the state’s Rs 100 crore allocation acts as seed capital for insurers.
Maharashtra has nearly 19,948 cooperative societies holding deposits worth Rs 90,501 crore across 3.1 crore depositors. If implemented, 80–90% of these deposits could be safeguarded, boosting depositor confidence, society stability, and sector transparency.