By Satish Marathe, Founder Member, Sahakar Bharati
I welcome most of the major provisions proposed in the MSCS ( Amendment ) Bill, 2022.
However, apparently it falls short on the following –
1. Presently, the Recovery Process under the MSCS Act is tardy and extremely time consuming, bordering on defeating Recovery efforts of the CoOps. The present system should have been completely overhauled.
2. Absence of provision for empowering CoOps to enter OTS, undertake Write Offs, Waiver/Reduction in interest rates, etc is not in keeping with current trends.
3. Just as the Banking Regulation Act ( Amendment ) 2020 empowered CoOp Banks to raise Long-term Funds/Capital by issue of Bonds & Equity, there is no such provision in the proposed Amendment. Merely allowing Coops to issue Non-voting Shares is not enough.
4. Similarly, the MSCS Act Amendment Bill should have empowered CoOps to establish SPVs and 100% owned Companies as in several developed countries. This would have facilitated access to Capital Markets. This is particularly needed as Country’s emphasis is now focused on Agro Processing, Allied Agri Activities, Export of Agri Produce, Production of Ethanol, etc
5. No provision to promote/ facilitate opening of new CoOps under the MSCS Act. This is absolutely necessary due to partisan policies being pursued by various State Govts. And, also because the spread and density of CoOps is most uneven in the Country.
6. The MSCS Amendment should have clearly stated that the task of Audit would be exclusively in the domain of Chartered Accountants.
7. Absence of any provision for exit of Dysfunctional, Non-viable, Loss Making CoOps should have been a part of the MSCS Amendment Bill.