In a significant development aimed at enhancing governance and accountability in the cooperative sector, the Ministry of Cooperation has passed an order whereby Multi-State Credit Co-ops have to abide by the “Fit & Proper” Criteria mandated for CEOs.
It bears recalling that the Multi-State Cooperative Societies (MSCS) (Amendment) Act, 2023 has introduced comprehensive guidelines for the appointment of Chief Executive Officers (CEOs) in multi-State credit societies.
According to the amendment, several conditions must be met to qualify for the position of CEO in a multi-State cooperative society. Notably, the age range for CEOs is now set between twenty-one and seventy years. However, exceptions for individuals above seventy years can be made through a special resolution passed by three-fourths of the board members.
The Act prohibits the appointment or continuation of employment for individuals who are undischarged insolvent, have a criminal record with a sentence exceeding six months, or fail to meet the “fit and proper” criteria determined by the Central Registrar. This criterion is particularly relevant for multi-State credit societies, where fitness and propriety are crucial considerations.
In line with section 51(1A)(d) of the Act, the “Fit and Proper” criteria for appointing CEOs of multi-State credit societies have been specified. The categorization of societies based on deposits includes Micro (up to Rs.10 cr.), Small (above Rs. 10 cr. and up to Rs.100 cr.), Medium (above Rs. 100 cr. and up to Rs.500 cr.), and Large (above Rs. 500 cr.).
The eligibility norms for CEOs in each category include essential qualifications such as being a graduate from a recognized university in any stream or possessing qualifications like CA/ICWA/CAIIB/Diploma in Cooperative Business Management. Knowledge of the local language is also deemed essential. Desirable qualifications encompass certifications in various fields, including computer applications, cyber laws, labour laws, finance, accountancy, or law.
Relevant experience in the financial sector at the middle or senior level is a prerequisite, ranging from a minimum of 2 years for ‘Micro’ Credit Societies to a minimum of 8 years for ‘Large’ Credit Societies.
Moreover, prospective CEOs must adhere to various conditions such as not engaging in other businesses or vocations, not being elected members of any legislature/local body, and not holding positions in trading, commercial, or industrial concerns. They must also submit a self-declaration on personal integrity.
The newly established norms will also be applicable to CEOs of multi-purpose societies engaged in credit activities, aligning with their approved bye-laws. The announcement concludes with the assurance that these guidelines have been issued with the approval of the Competent Authority, as communicated by Assistant Commissioner (Cooperation) Nisha Sagar.