Chapter III FUNDS

Mobilisation of Funds. A Co-operative may subject to the jurisdiction and such conditions as specified in its bye-laws mobilise funds in the form of share capital, deposits, debentures, loans and other contributions from its members and other than deposits from any other financial institutions and organisations. Provided that a Co-operative shall not be eligible to receive any loan, subsidy, grant or financial aid in any form from the Government or any guarantee by the Government. In the Principal Act, in section 38A, after sub- section (4), the following sub-section shall be inserted, namely:- "(5) The Federal Cooperative shall appoint a Special Officer to conduct the elections of the Souharda Cooperative Society as provided under sub-section (6-A) of section 48."

After section 17 of the principal Act, the following new section shall be inserted, namely:- “17A. Restrictions on holding shares.– In any Co-operative, no member shall hold more than such portion of the total share capital of the Co-operative exceeding five percent thereof as may be prescribed.”

Investment of Funds. Such of its funds as are not immediately required for use by a co-operative, shall be invested or deposited outside its business, namely:-

With the Karnataka State Co-operative Apex Bank Ltd. or District Central Co-operative Bank Ltd or Urban Co-operative Bank; and

With any scheduled bank regulated by the Reserve Bank of India with the prior permission of the Registrar.

Provided further that nothing contained in the first provision shall apply to a Co-operative Bank

Provided also that no Souharda Co-operative societies undertaking credit activities shall not utilize the mobilized deposit for non-credit activities other than lending and investments. In the Principal Act, in section 48, after sub- section (6), the following sub-section shall be inserted, namely:- "(6-A) After issuing the Order for cancelling the order issued by the registrar Co-operative society for winding up of the society, the Federal Co-operative shall appoint a special officer to conduct the election of the Co-operative Society."

No Co-operative shall make a contribution in whatever form ether in cash or in kind, either directly or indirectly to an organisation that has an object in furtherance of the interest of a political party or of any religious faith. In the Principal Act, in section 53, in sub- section (7), after clause (u) the following clauses shall be inserted, namely:- "(v) The Board of directors or employees of any Souharda Cooperatives commits any irregularities or misappropriation or fraudulence reported under sections 33 or 35 or clause (u) of sub-section (7) of section 53, the Souharda Federal shall file a criminal case against the persons involved in the said reports. (w) The Souharda Federal shall issue circulars/directions in respect of working of member Cooperatives under the provisions of this Act and rules made thereunder."

Deduction from salary to meet cooperatives‟ claim in certain cases. (1) A member of a cooperative may execute an agreement in favour of the cooperative providing that his employer shall be competent to deduct from the salary or wages payable to him by the employer, such amount as may be specified in the agreement, and to pay the amount so deducted to the cooperative in satisfaction of any debt or other demand owing by the member to the cooperative.

Provided that the employee shall obtain prior concurrence in writing of the employer agreeing to deduct from his salary or wages such an amount as specified in such agreement.

Provided further that the liability of the employer shall be limited to the extent of deduction of an amount which if included makes the total of all the deductions from the salary not to exceed fifty percent of the salary of the employee.

Provided also that the board of the cooperative shall determine the amount of loan and the number of installments to be granted to the employee in such a manner that the total of all deductions including the deduction on account of the loan installment along with interest thereon shall not exceed fifty percent of the salary of the employee.

(2) On the execution of such an agreement, the employer shall, if so required by the co-operative by requisition in writing and so long as such debt or demand or any part of it remains unpaid, make the deduction in accordance with the agreement and pay the amounts so deducted to the cooperative within fourteen days from the date of the deduction.

(3) Nothing contained in this section shall apply to persons employed in railways as defined in Article 366 of the constitution, mines and oil fields.