Provisions for guarantee funds to meet certain losses

(1) It shall be competent for the government to constitute one or more guarantee funds on such terms and conditions, as it may deem fit, for the purposes of meeting losses that might arise as a result of loans being made by a co-operative society on titles to immovable property subsequently found to be defective or for any other purposes under this Act, for which in the opinion of the Government it is necessary to provide for or create a separate guarantee fund. (2) Such society shall contribute to such funds at such rate and the constitution, maintenance and utilization of such funds shall be governed by such terms as may be prescribed.