In the wake of a spate of scams indulged in by chit fund agencies like Sharda and others, the Union Agriculture Ministry began treating credit co-ops shabbily and with suspicion, without realizing the importance of their role in financial inclusion.
Through a Circular the govt asked credit co-ops to paste a notice on their premises that the govt is not responsible for members’ deposits. “Does it not inflame doubts in the minds of members”, asked many cooperators while talking to Indian Cooperative. “Why should the govt be responsible for deposits and in fact what was the need of declaring that out of context in the first place”, they wondered.
Readers would note that Dept of Cooperative in the Union Ministry issued a circular to all Multi State Cooperative Societies (except multi state cooperative banks) functioning as autonomous cooperative organizations accountable to their members and not under the administrative control of the Central Registrar directing them to display the circular in entrances of societies, their branches and also to post it on their websites saying the central registrar is not responsible for deposits of members.
Reacting strongly Stephen George, ex-MLA and Chairman of Kerala based Knanaya Multi-State Cooperative Credit
Society said “The issuance of this circular by the Ministry of Agriculture and Farmers Welfare has not only weakened credit cooperative societies but also reduced people’s faith in cooperatives in general.
“In consequence, people have begun to shy away from parking their deposits in credit societies”, said George. Government of India should strengthen cooperatives of the country with new plans and policies instead of weakening them. We are the only sector that serves the last man of society, he told this correspondent during his visit to Delhi.
”George also informed that we are eager to expand our business activities but as of now we want to open a branch we have to take the permission from the Central Registrar. Earlier, we could open branches without taking permission. We fail to understand why the government is harassing the coop sector’’, he asked.
”We have applied for opening 10 branches in the state but we have not yet got any response from the Department of Cooperation in this connection, he said with a tinge of sadness.
According to a survey, governments in most of the countries are not collecting taxes from cooperative societies then why the Indian Government can’t do the same and give exemption to cooperatives under 80 P?, he demanded.
Knanaya Multi-State Cooperative Credit Society Chairman said “In the wake of demonetization the society suffered a loss of about 10 crore because of re-payment of loans and the implementation of GST will also affect our balance sheet in the current financial year”.
Recalling the history of the society George said “The society was established in 2012 with an objective to help the farmers as well as poor people of society.
”Presently, the society has a deposit base of about 70 crore and nearly 2,500 are its members. We are disbursing 10 percent dividends to our members and giving loans at 13 percent ROI. The society has adopted modern technology in its activities. The society has 15 branches across Kerala”, George said.
As a matter of fact MSCS should add a phrase that:
“For due return of matured depoits the Society assures the depositors that they have not to be scared of stray instances of defualts in returning deposit amounts on maturiy.”