By Accommodation Times News Service
Government to safeguard the interest of small investors has decided to soon get a regulatory board to control the rates of loans and deposits and also raise deposits guarantee fund to insure deposits of investors of the societies which is in loss. Out of total 15,182 credit societies in Maharashtra about 5,851 which come up to 40% are incurring losses while more than 470 have been shut down leaving the investors in trouble. The total worth of non-performing assets of credit societies has reached Rs 1,917crore resulting in an imbalance in the ratio of credits and deposits. The government has proposed an amendment to the Maharashtra Co-operative Society Act 1960 to include a new chapter on regulation of societies. Co-operation Minister said there is no provision on credit societies that have been fleecing investors in the absence of a regulation. The department has prepared the draft for the amendment and we are planning to introduce the bill in the next session. Giving more information he said the premium to be levied on these societies will be decided by the board, based on their financial position and risk to the investors. The government has proposed this amendment under the Maharashtra Cooperative Society Act 1960 to include a new chapter on regulation of societies. One of the department officer said, there is no control over the operation of these societies and their board of directors unlike in case of banks. The societies lure investors by offering high interest rates which are disproportionate to the lending rate and recovery on deposits. The investors in banks have an insurance of Rs 1lakh created from the deposits guarantee fund set up with the help of the premium collected from banks. This new regulatory board if came into existence will be headed by co-operative commissioner and comprising retires officers from NABARD, banking sectors and CAs. Regular monitoring by the board will ensure regular audits and measures to keep NPAs under control. This will be a re-introduction of the bill as it has been lapsed after the State government initiated the 97th constitutional amendment in the society act. The bill is in waiting for the consent of the President.