Union Home and Cooperation Minister Amit Shah has assured depositors that the government is taking firm measures against fraudulent multi-state cooperative credit societies accused of financial mismanagement.
In a written reply in Parliament, Shah informed that based on several complaints, the Central Registrar of Cooperative Societies had ordered inspections against Jijau Maa Saheb Multi State Cooperative Credit Society Ltd., Dnyanradha Multi State Cooperative Credit Society Ltd., Shubh Kalyan Multi State Cooperative Credit Society Ltd., and Rajasthani Multi State Cooperative Credit Society Ltd.
The inspections revealed serious lapses. Since no satisfactory replies were received from these societies, the government issued winding-up orders under Section 86 of the MSCS Act, 2002. Liquidators have been appointed under Section 89 to liquidate assets and ensure repayment to depositors and members in a time-bound manner.
Shah further highlighted that to safeguard the interests of members and investors, the government has strengthened the legal framework through the Multi-State Cooperative Societies (Amendment) Act, 2023. The amendments are aimed at enhancing transparency, accountability, and governance in the cooperative sector.
Key reforms include the establishment of a Cooperative Election Authority for timely and transparent elections, appointment of a Cooperative Ombudsman to address grievances, and mandatory Information Officers in societies to provide information to members. For societies with deposits exceeding Rs 500 crore, Concurrent Audit has been made compulsory.
The amendment also provides for audit reports of apex societies to be laid in Parliament, empowers the Central Registrar to conduct inquiries into fraudulent activities, introduces prudential norms for thrift and credit societies, and strengthens provisions to curb nepotism, conflicts of interest, and mismanagement in decision-making.
“These reforms will ensure that no one misuses the cooperative platform for unlawful or fraudulent purposes. Protecting depositors’ rights is our foremost priority,” Shah said in his reply.