Speaking during the technical session on transparent elections in multi-state cooperatives, Ashish Kumar Bhutani, Secretary of the Ministry of Cooperation, said concerns over governance and financial practices in several credit cooperatives have affected public confidence in the sector.
Bhutani noted that many societies are not fully following prudential norms, which has led to reputational challenges for credit cooperatives. “There has been considerable criticism and loss of trust in some cases,” he said, adding that while many employee-based cooperative credit societies function well, “somewhere things are not correct in several societies.”
He said the gap between deposit and lending rates highlights the need for stronger financial discipline and strict adherence to prudential norms in cooperative credit institutions.
Bhutani said the government is working to strengthen oversight in multi-state cooperative societies (MSCS). Steps being taken include introducing concurrent audits in large societies, developing audit standards aligned with government norms, and ensuring stricter monitoring of societies with a turnover above Rs 100 crore.
He also announced that the office of the Central Registrar of Cooperative Societies will soon open a regional office in Pune to improve coordination. Bhutani added that issues related to credit cooperatives have also been raised frequently in Parliament, highlighting the need for stronger governance and transparency in the sector.
