Union Cooperation Minister Amit Shah on Tuesday informed the Lok Sabha that the government has initiated strict action against several Multi-State Cooperative Credit Societies after receiving complaints from investors and members about financial irregularities and non-payment of deposits.
In a written reply, Shah said cooperative societies registered under the Multi-State Cooperative Societies Act, 2002 function as autonomous organizations accountable to their members and operate according to their approved bye-laws. He explained that the board of a society is responsible for major decisions such as admitting members, accepting deposits and refunding depositors, while the day-to-day operations are managed by the Chief Executive.
The minister said complaints were received against five societies, Jijau Maa Saheb Multi State Cooperative Credit Society Ltd., Dnyanaradha Multi State Cooperative Credit Society Ltd., Shubh Kalyan Multi State Cooperative Credit Society Ltd., Shri Sairam Urban Multistate Cooperative Credit Society Ltd. and Rajasthani Multi State Cooperative Credit Society Ltd.
Following these complaints, inspections were conducted by the Registrar of Cooperative Societies, Maharashtra. Based on the inspection findings, the Central Registrar issued notices to the concerned societies seeking explanations. However, as no satisfactory responses were received, winding-up orders were passed under the provisions of the Act and liquidators were appointed.
Among these, the Dnyanaradha Multi State Cooperative Credit Society case has emerged as one of the biggest cooperative credit frauds in recent years. Authorities in Maharashtra alleged that the society collected thousands of crores of rupees from lakhs of depositors by promising unusually high interest rates. Investigations later found that funds were allegedly diverted to companies linked to the promoters instead of being used for legitimate lending activities. Large-scale defaults followed, leaving a huge number of depositors struggling to recover their savings.
The scam triggered multiple criminal cases and enforcement action against the promoters and directors of the society. Several assets, including land and commercial properties linked to the promoters and associated companies, were attached during the investigation as authorities attempted to recover money for depositors.
Complaints were also received against other societies such as Jijau Maa Saheb, Shubh Kalyan, Shri Sairam Urban and Rajasthani Multi State Cooperative Credit Society, where investors alleged delays or failure in repayment of deposits. Many depositors had reportedly invested their life savings after being attracted by higher returns than those offered by banks.
Shah said that with the appointment of liquidators, the process of identifying and selling the assets of these societies has begun. The proceeds from the sale will be used to repay investors and members in accordance with the provisions of the law.
The government, he added, remains committed to safeguarding the interests of depositors while ensuring accountability and transparency in the functioning of cooperative credit societies across the country.