New Delhi : Cooperative societies cannot be treated as banks, said Union Finance Minister Nirmala Sitaraman. Cooperative societies do hold license issued under Banking Regulations Act nor do they enjoy RBI approval. Information issued to the public cannot be withdrawn, said Sitaraman.
Primary Cooperative Societies cannot suffix the term ‘Bank” to their names; Deposits should not accepted from persons lacking voting rights; Deposits from non-members shall not enjoy insurance coverage - these were some restrictions the RBI issued in its order and are part of the centre’s attempt to destroy the cooperative sector.
The decision holds adverse implications for 1625 primary cooperative societies and 15,000 other cooperative societies. The new restrictions affecting cooperative societies were brought about by way of amendments in the Banking regulations Act. However Kerala did not implement them, following which, the RBI came about with its order. The state government shot letters on 1 and 2 Dec in this regard. And, the current response indicates RBI’s unfavourable disposition to contents of those letters and others of the smiliar kind.
