The National Cooperative Union of India (NCUI) is to take up the issue of an amendment in its bye laws in order to avert any future situation in which the current President Chandra Pal Singh Yadav got entangled by the ruling of the arbitrator Mr Manjhi.

The apex cooperative organization is holding its Annual General Meeting (AGM) in N Delhi on Thursday where delegates from various parts of the nation are expected to participate.

The duly elected representatives of national level cooperative federations such as IFFCO,KRIBHCO or NAFED would be held as elected and not nominated after this amendment. Only government nominated members would be treated as nominated.

Talking to Indian Cooperative, NCUI President Chandra Pal Singh Yadav said that this provision was already there but in the light of arbitrator’s ruling we have felt the need for introducing a “small clarification”.

When Indian Cooperative asked him if this change in bye law would help him in current legal imbroglio, Chandra Pal said “ It would not help me in present case but in future such constitutional crisis could be averted”.

“There is already provision in NCUI bye laws that four highest paid cooperative federations would have say in the affairs of NCUI and their representative would have all the rights enjoyed by other members of Governing Council. They are elected members in their parent organization and thus should be treated as such by NCUI also”, Chandra Pal Singh added.

General Body may also make a renewed appeal to government for release of fund as its various field projects are languishing with staffs driven to the brink of starvation.

It was government which funded these projects and NCUI’s job was to monitor them. We may also meet the agriculture Minister again to make a request for release of the fund, said Mr Singh.

West Bengal Chief Minister Mamata Banerjee has said that a law that allows attachment and auction of farmland for failure to repay loans would soon be amended in the state.

She has severely criticized the former communist government for legislating the West Bengal Cooperative Societies Act, 2006,
that allowed this, and according to her it only showed the anti-farmer attitude of the communists.

However, Mamta Banerjee’s statement has drawn fierce criticism from the left circles. They have charged that Chief Minister’s stand would not only harm the cooperative movement in the state but would also expose poor farmers to the usurious traditional moneylenders.

Sources having knowledge of the cooperative scene in West Bengal also fear that Mamta’s populist may adversely affect the growth of the cooperative sector in the state.

The Reserve Bank will issue the final guidelines for granting bank licences to Corporate only after Parliament approves the Banking Laws (Amendment) Bill, 2011.

The final guidelines on new banking licences would be released only after the necessary amendments to the Banking Laws (Amendment) Bill, which seeks to give more power to the regulatory powers of the RBI, sources said.

Banking companies are engaged in multifarious activities through the medium of associate enterprises. It has, therefore, become necessary for the Reserve Bank, as the regulator of the banking companies, to be aware of the financial impact of the business of such enterprises on the financial position of the banking companies, sources said.

The central bank had last month issued the draft guidelines which pegged the minimum capital needed to set up a commercial bank by a corporate house having successful track record of 10 years at Rs 500 crore.

It is to be noted that the Banking Laws (Amendment) Bill was introduced in Parliament in March this year.

Sources added that empowering the RBI is essential for obtaining information about the other businesses of the corporate houses seeking banking licences in order to protect depositors’ interests.

It is, therefore, proposed to confer power upon the RBI to call for information and returns from the associate enterprises of banking companies also and to inspect the same, sources added.

The amendment seeks to allow the RBI to supersede the board of a banking company for a total period not exceeding 12 months.

The proposed amendment moved by the government also exempts mergers and acquisitions in the banking sector from the scrutiny of the Competition Commission of India.

According to the draft guidelines, companies which are primarily engaged in the real estate or stock broking will not be eligible for promoting bank.

“Entities or groups having significant (10 per cent or more) income or assets or both from real estate, construction and broking activities individually or taken together in the last three years will not be eligible to set up new banks,” the draft said.

On foreign holding, it said the aggregate non-resident shareholding in the new bank should not exceed 49 per cent for the first five years.

At present, the foreign shareholding in private sector banks is allowed up to 74 per cent of the paid-up capital.

The Union Cabinet on Thursday  approved the introduction of the Multi-State Co¬operative Societies (Amendment) Bill, 2010 in the Parliament.

These amendments are intended to enhance the public faith in the cooperatives and to ensure better accountability of the management towards its members and the law of the land.

It is proposed to define active member to ensure the member’s active participation in the affairs of the society. Time bound decision by the society for admitting members is proposed to prevent inordinate delay by the society in admitting members.

A clause is proposed to be inserted for ensuring that the members make their payment due to the society to be eligible for exercising their rights as a member.

It is proposed to allow the MSCS to refund full or part of the share capital subscribed by the Government to reduce/eliminate Government control of these cooperatives.

To ensure presence of experts on the board, it is proposed to provide that the co-opted directors should have experience in the field of banking, management, finance or specialization in any field relating to the objects and activities undertaken by the MSCS.

The Directors will also be required to disclose the interest of their relatives in the affairs of the society.

It is proposed to give freedom to the Board to constitute an Executive Committee and other committees or sub-committees as specified in the bye -laws.

However, it is proposed that every society shall be required to constitute an Audit and Ethics Committee of the Board. The existing restriction on borrowings by the society is proposed to be relaxed.

The proposed amendments also include provisions for filing of applications, documents, inspections, payment of fees, charges and issuance of certificates of registration and maintenance of documents by Central Registrar in electronic forms.

It also provides for cancellation of registration if obtained by mis-representations of facts, submission of false or misleading information, suppression of material facts or fraud etc.

Reservation of seat for the SC/ST and women on the board, constitution of interim board of experts for rehabilitation of a sick society, election authority for conduct of election and Cooperative Rehabilitation and Reconstruction Fund for rehabilitation and development of cooperative societies have also been proposed.

The proposed amendments also include provision for Cooperative Information Officer and Appellate Authority to provide information to the members about the affairs and management of the society.

It also has penal provisions for non filing of returns; non-admission of new members by the administrators when the board is under supersession.

Background

The objective of Multi-State Co-operative Societies (MSCS) Act 2002 is to facilitate the organization and functioning of the cooperative societies having jurisdiction in more than one States.

This Act which came in force with effect from 19.8.2002 was enacted to replace the Multi-State Cooperative Societies Act, 1984. The Act facilitates voluntary formation and democratic functioning of multi-state cooperative societies as member driven institutions based on self-help and mutual aid and to enable them to promote their economic and social betterment and provides for functional autonomy.

Based on the experience of implementation of the MSCS Act, 2002,  and recommendations made by the High Powered Committee under the chairmanship of Shri S.O. Patil, a need was felt to further amend the Multi-State Co-operative Societies Act, 2002.

It felt the  need to keep the legislation in tune with the changing economic policies and to facilitate the multi-state co-operative societies to take advantage of the new and emerging opportunities.