Orissa to repeal co-op law that helped chit funds grow

With the chit fund scam raging in West Bengal,the Orissa government has decided to repeal a decade-old Cooperative Act that led to mushrooming of chit fund firms in the state in the guise of self-help cooperatives.

Written by Debabrata Mohanty | Bhubaneswar | Published: May 18, 2013 3:13 am

With the chit fund scam raging in West Bengal,the Orissa government has decided to repeal a decade-old Cooperative Act that led to mushrooming of chit fund firms in the state in the guise of self-help cooperatives.

The Orissa Self Help Cooperative Act framed in 2001 by the BJD government was thought as a reformist law that would boost the cooperative movement in the state. Till March 31 this year,1,634 self-help cooperatives were registered with Registrar of Cooperative Societies of Orissa. Of them,979 were credit and multipurpose self help cooperative societies,which raised money from public with assurance of massive returns in a short time. But most of these cooperatives have turned out to be huge scams running away with the depositors’ money.

Chief Secretary B K Patnaik last week said an ordinance would be brought repealing the law and all such self-help cooperatives would be brought under the control of the government. The cooperatives would be given an option to come under government control in three months or their properties would be taken over.

Some of these cooperatives such as Seashore Self-help cooperative Ltd,Maa Mangala Saving and Credit Cooperative Society Ltd and Balasore Mercantile Cooperative Ltd are being probed by the CID-CB of the Orissa Police.

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