Chapter X CO-OPERATIVE PRINCIPLES

The Co-operatives registered under this Act shall as far as possible be guided by the following Co-operative principles, namely:- (1) Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination. (2) Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In Primary Co-operatives, members have equal voting rights (one member, one vote) and Co-operatives at other levels are organised in a democratic manner. (3) Members contribute equitably to, and democratically control the capital of their Co-operative. Atleast part of that capital is usually the common property of the Co-operative. They usually receive limited compensation, if any, on the capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes, developing the Co-operative possibly by setting up reserves part of which atleast would be indivisible, benefitting members in proportion to their transactions with the Co-operative, and supporting other activities approved by the membership. (4) Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations including Government or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their Co-operative autonomy. (5) Co-operatives provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their Co-operatives. They inform the general public particularly young people and leaders about the nature and benefits of co-operation. (6) Co-operatives serve their members most effectively and strengthen the Co-operative movement by working together through local, regional, national and international structures. (7) While focusing on member needs, Co-operatives work for the sustainable development of their communities through policies accepted by their members.

(1) Notwithstanding anything to the contrary contained in this Act, in the case of a co-operative bank which is an insured bank, the Registrar shall,– (i) if so required by the Reserve Bank, in the circumstances mentioned in section 13D of the Deposit Insurance and Credit Guarantee Corporation Act, 1961, make an order for winding up of a Co-operative Bank; (ii) where an order of moratorium has been made by the Central Government under sub-section (2) of section 45 of the Banking Regulation Act, 1949, make

Where a co-operative bank being an insured bank is wound up or taken into liquidation and the Deposit Insurance Corporation has become liable to the depositors of the insured bank under sub-section (1) of section 16 of that Act, the Deposit Insurance Corporation shall be reimbursed by the liquidator or such other person in the circumstances, to the extent and in the manner provided in section 21 of the Deposit Insurance Corporation Act, 1961.