The Central Registrar of Cooperative Societies (CRCS) under the Ministry of Cooperation has prohibited Nirmal Ujjwal Credit Cooperative Society Ltd., Nagpur from accepting fresh or new deposits, contributions or investments from its members, and from renewing any existing deposits until further orders.
The direction was issued through an order dated April 24, 2026, with compliance communication sent on Monday. The action follows a notice issued on April 8, 2026, based on observations emerging from an ongoing investigation by a Special Investigation Team (SIT).
The notice recorded prima facie concerns, including sanction of loans in the names of staff that were subsequently transferred to an entity identified as PNG Corporation, loans granted to persons associated with the said entity, and substantial loan amounts disbursed during the period 2020–2025 remaining unpaid.
It also noted a loan of significant magnitude extended to the then Secretary with inadequate recovery action, along with non-submission of complete annual returns as required under the Multi-State Cooperative Societies Act, 2002.
The Society, in its written reply dated April 14, 2026, denied the allegations but did not furnish documentary evidence in support of its submissions. During the personal hearing held on April 24, 2026, representatives of the Society were heard.
As recorded in the order, the Society acknowledged that it had made PNG Corporation and Nirmal Food Product its members and granted loans to them, which appeared to be in violation of the provisions of the Act. It was also noted that recovery steps appeared to have been initiated after issuance of the notice and commencement of the SIT investigation.
The order further records that the matter remains under investigation by the SIT, and that the Bombay High Court, in its order dated March 24, 2026, had taken note of prima facie involvement of certain office bearers of the Society.
Upon consideration of the material on record, including the Society’s reply and submissions during the hearing, the CRCS observed prima facie issues relating to financial impropriety, diversion of funds, conflict of interest and regulatory non-compliance. It held that permitting the Society to continue mobilizing deposits without restriction could expose members and depositors to financial risk.
Accordingly, the Society has been directed to immediately inform all its members and depositors of the directions and to display the order prominently on its official website as well as at all its offices and branches, under intimation to the CRCS. The restrictions will remain in force until further orders.
In what could be seen as a first-of-its-kind action, the CRCS has taken a strict regulatory step against a credit cooperative in India, drawing parallels with the kind of interventions undertaken by the Reserve Bank of India in the banking sector.