Rajasthan High Court has ruled that the credit cooperative societies could not engage in any banking activities without a proper licence from the RBI.
The court gave this order while hearing a petition filed by one Mr. Sajjan Singh Bhatti asking for legal action against these societies. The petitioner’s argument was the societies are working parallel to banks and thus flagrantly flouting cooperative laws.
The petitioner also submitted before the court that the credit cooperative bodies do not even have the necessary RBI licence for doing banking business.
There have been cases where some of these societies have even made away with the hard earned money of their depositors, the petitioner told the court.