In a significant development in the cooperative finance sector, the Cooperative Ombudsman Alok Agarwal has directed the Bengaluru-based Indian Cooperative Credit Society Ltd. to take a final decision within 15 days on a complaint regarding the premature closure of a recurring deposit.
The case was filed by Jijesh T., a depositor who had opened an 84-month recurring deposit of Rs 3,000 per month on 21 October 2023 under RD No. R1 32061487. Citing financial hardship, he had submitted written requests on 23 October and 1 November 2024 seeking early closure of the RD account, but received no response from the Society.
Following multiple unanswered communications, Jijesh T. approached the Cooperative Ombudsman. The Ombudsman’s office issued notices on 6 December 2024, 30 December 2024, and 23 January 2025, all of which were ignored by the Society.
A formal hearing was eventually held on 11 April 2025, during which Jijesh appeared personally, while the Society was represented by Ravi Shankar, Senior Manager (Operations).
The Society maintained that premature closures were restricted and could only be approved under specific circumstances such as medical emergencies, terminal illness, or educational expenses for the depositor and immediate family, as per a Board resolution passed on 3 April 2023.
However, it came to light during the hearing that the Society’s representative had earlier mistakenly stated marriage as a valid ground, which was not listed in the resolution.
The Ombudsman noted the Society’s failure to respond to multiple official notices and its lack of proactive engagement with the complainant. He pointed out that while cooperative societies are entitled to enforce contractual conditions, such terms should not be applied in a manner that unfairly disadvantages a member, particularly when the Society has demonstrated administrative indifference.
After considering all submissions and reviewing the applicable Board resolution, Ombudsman Agarwal issued a formal directive instructing the Indian Cooperative Credit Society Ltd. to arrive at a decision within 15 days regarding the premature closure request and to submit a compliance report immediately thereafter.
The case underscores the increasing assertiveness of the Cooperative Ombudsman in protecting depositor rights and holding cooperative societies accountable to basic standards of communication and fairness.
In recent months, the Ombudsman has dealt with several similar complaints, often related to delays in processing fixed or recurring deposit claims.
The present order reinforces the principle that procedural rigidity should not come at the cost of individual distress, and that societies must honor their obligations both in spirit and in practice.
(This order was issued roughly a fortnight ago. Indian Cooperative will update its readers as soon as further developments are available)
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