Union Minister of Cooperation Amit Shah has informed that the Multi-State Cooperative Societies (MSCS) (Amendment) Act and Rules, 2023, notified in August 2023, have significantly strengthened governance, transparency and accountability in the multi-state cooperative sector.
The reforms supplement the existing MSCS Act, 2002 and incorporate key provisions of the Ninety-seventh Constitutional Amendment, with a focus on democratic functioning and robust oversight.
Review of compliance and governance of Multi-State Cooperative Societies is a continuous process, and action is taken wherever irregularities are noticed. As part of the reforms, the Cooperative Election Authority has conducted 197 elections of Boards of Directors and office bearers of MSCSs till October 2025, ensuring democratic governance.
To address member grievances, the Cooperative Ombudsman has passed 36 orders till December 2025.
All MSCSs have been directed to appoint Cooperative Information Officers to enhance transparency. For stronger financial oversight, concurrent audit has been introduced for societies with turnover or deposits exceeding Rs 500 crore, from auditor panels approved by the Central Registrar. Separate panels have been notified for statutory audit and concurrent audit based on financial size. The Central Government has also been empowered to determine accounting and auditing standards.
To strengthen annual reporting, MSCSs are required to file detailed annual returns online through the CRCS portal within six months of the close of the accounting year. Non-compliance can lead to disqualification.
So far, 113 Multi-State Cooperative Societies, including banks, have been placed under liquidation due to non-compliance, mismanagement or statutory reasons, underscoring the government’s strict stance on accountability in the cooperative sector.
To ensure fair and democratic elections within societies, the Multi-State Cooperative Societies (Amendment) Act, 2023 establishes a Cooperative Election Authority to oversee elections and enhance electoral discipline.
The Act also introduces the office of a Cooperative Ombudsman and a Cooperative Information Officer to provide efficient redressal of member complaints and timely access to information.
To support struggling cooperatives, the Multi-State Cooperative Societies (Amendment) Act, 2023 creates a Cooperative Rehabilitation, Reconstruction and Development Fund financed by contributions from profitable multi-state cooperatives.
For ease of doing business and administrative efficiency, it mandates electronic filing of applications, documents, returns and accounts, and reduces the registration timeline with provisions for error rectification.
Additional reforms allow state cooperative societies to merge into multi-state entities subject to applicable laws, limit conflicts of interest in leadership appointments, and increase monetary penalties for contraventions.
These changes took effect in August 2023 and are part of a broader push to modernise India’s cooperative sector.
