- On Tuesday, Union Cooperation Minister Amit Shah shared with the Lok Sabha that the government has taken decisive action against several Multi-State Cooperative Credit Societies.
- This comes after investors and members raised concerns about financial irregularities and issues with deposit payments.
- In his written response, Shah explained that these cooperative societies, which are registered under the Multi-State Cooperative Societies Act of 2002, operate as independent entities that are accountable to their members and adhere to their established bye-laws.
- He pointed out that the society’s board is in charge of key decisions, like admitting new members, accepting deposits, and handling refunds for depositors, while the Chief Executive oversees the daily operations.
- The minister mentioned that complaints had been filed against five specific societies: Jijau Maa Saheb Multi State Cooperative Credit Society Ltd., Dnyanaradha Multi State Cooperative Credit Society Ltd., Shubh Kalyan Multi State Cooperative Credit Society Ltd., Shri Sairam Urban Multistate Cooperative Credit Society Ltd., and Rajasthani Multi State Cooperative Credit Society Ltd.
On Tuesday, Union Cooperation Minister Amit Shah shared with the Lok Sabha that the government has taken decisive action against several Multi-State Cooperative Credit Societies. This comes after investors and members raised concerns about financial irregularities and issues with deposit payments.
In his written response, Shah explained that these cooperative societies, which are registered under the Multi-State Cooperative Societies Act of 2002, operate as independent entities that are accountable to their members and adhere to their established bye-laws. He pointed out that the society’s board is in charge of key decisions, like admitting new members, accepting deposits, and handling refunds for depositors, while the Chief Executive oversees the daily operations.
The minister mentioned that complaints had been filed against five specific societies: Jijau Maa Saheb Multi State Cooperative Credit Society Ltd., Dnyanaradha Multi State Cooperative Credit Society Ltd., Shubh Kalyan Multi State Cooperative Credit Society Ltd., Shri Sairam Urban Multistate Cooperative Credit Society Ltd., and Rajasthani Multi State Cooperative Credit Society Ltd.
In response to these complaints, the Registrar of Cooperative Societies in Maharashtra conducted inspections. Following these inspections, the Central Registrar issued notices to the societies in question, asking for explanations. Unfortunately, as the responses were unsatisfactory, winding-up orders were issued in accordance with the Act, and liquidators were appointed to manage the process.
Among the various cases, the Dnyanaradha Multi State Cooperative Credit Society scandal stands out as one of the largest cooperative credit frauds in recent memory. Authorities in Maharashtra have accused the society of amassing thousands of crores of rupees from millions of depositors by luring them in with promises of unusually high interest rates. However, investigations later revealed that the funds were allegedly funneled into companies connected to the promoters instead of being used for legitimate lending. This led to widespread defaults, leaving countless depositors in a tough spot as they tried to reclaim their hard-earned savings.
The fallout from this scam resulted in multiple criminal cases and enforcement actions against the society’s promoters and directors. During the investigation, several assets, including land and commercial properties tied to the promoters and their associated companies, were seized in an effort to recover funds for the depositors.
Additionally, complaints surfaced against other societies like Jijau Maa Saheb, Shubh Kalyan, Shri Sairam Urban, and Rajasthani Multi State Cooperative Credit Society, where investors reported delays or outright failures in getting their deposits back. Many of these depositors had invested their life savings, drawn in by the promise of higher returns than what traditional banks offered.
Shah mentioned that with liquidators now appointed, the process of identifying and selling off the assets of these societies has kicked off. The money generated from these sales will be used to reimburse investors and members, following the legal guidelines.
He also emphasized that the government is dedicated to protecting the interests of depositors while ensuring that cooperative credit societies operate with accountability and transparency throughout the country.