Cooperative societies taking investors for a ride

They are either going bankrupt or suddenly shutting shop.

Written by Partha Sarathi Biswas | Pune | Published: February 11, 2016 4:29:49 am

It’s well over six months since the multi-state multi-purpose credit society where Ramesh Sohoni (name changed on request) had deposited his life’s saving has closed down, but Sohoni is yet to get any clarity about when he would get his money back.

A resident of Kothrud, Sohoni had approached the Cooperative Commissioner in the city only to be told that they do not have jurisdiction over such societies. “They gave me the number of the central Registrar of Cooperative Societies in Delhi and asked me to correspond with them. I have sent numerous letters to them, but I have no idea when I will get my money back,” he said.

Like Sohoni, hundreds of people who had banked with multi-state multi-purpose cooperative societies find themselves in dire straits, with the societies either going bankrupt or suddenly closing down.

With the State Cooperative Commissioner directing them to correspond with the Delhi-based registrar’s office, most fail to take the steps necessary to recover their money or to book the defaulters.

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By definition, multi-state multi-purpose cooperative societies are bodies which are operational in more than one state. Among them are credit societies, banks, sugar and textile mills. However, while the banks come uner the dual control of the central registrar and the Reserve Bank of India, credit societies are answerable only to the registrar.

Powers of registration and control of such bodies are vested with the central registrar who operates under the Union Ministry of Cooperation and Agriculture. Of the 1,246 such societies in the country, Maharashtra alone has 550, the highest in the country.

But in the absence of any regional representation in the central registrar’s office is proving to be a major lacunae both for members of such societies as well as the office of the state commissioner of cooperative, whose office people invariably turn to in case of complaints.

Around 50 per cent of the 550-odd societies in the state are cooperative credit societies which become popular using get-rich-quick schemes. Such credit societies offer lucrative monetary schemes to attract investors and mostly the middle class or lower middle class people become their victims.

Last year, the Pune police had arrested the chairman and 12 other directors of the BHR Multi-State Multi-Purpose Society on complaints of fraud.

State Cooperative Commissioner’s office had received over 10 complaints about such the frauds which were forwarded to the central registrar’s office. A scrutiny of the records maintained by the central registrar shows that in the last one year, 49 societies were hauled up for alleged frauds and the process of de-registration started against them.

Meanwhile, Cooperative Commissioner Chandrakant Dalvi has written to the central registrar of cooperative bodies asking for opening of a regional office in Maharashtra to deal with the working of such bodies and related complaints. However, senior officers said the letter was yet to get any answer.

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