Chapter V Financing of co-operative societies by banks

Notwithstanding anything contained in the Maharashtra Co-operative Societies Act, 1960 (Mah. XXIV of 1961), or the bye-laws of a resource society as defined in that Act or any law for the time being in force, it shall be lawful for a bank to become a member of a co-operative society.

1. (1) A bank shall have the right to inspect the books of any co-operative society, which has either applied to the bank for financial assistance or is indebted to the bank on account of financial assistance given earlier.
2. (2) The inspection may be carried out by an officer or any other member of the paid staff of the bank, with the previous sanction in writing of the Registrar.
3. (3) The officer or other member of the paid staff of the bank undertaking such inspection, shall, at all reasonable times, have access to the books of accounts, documents, securities, cash and other properties belonging to or in the custody of the co-operative society inspected by him, and shall also be supplied by such society such information, statements and returns as may be required by him to assess the financial condition of the society and the safety of financial assistance to be given to the society or already given to it.

1. (1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, management or business of a co-operative society, between a bank financing a co-operative society and the co-operative society so financed, other than disputes regarding disciplinary action taken by the society or its committee against a paid employee of the society, shall be referred by either of the parties to the dispute, to the Registrar for decision.
2. (2) Where any question arises whether, for purposes of the foregoing sub-section, a matter referred to for decision is a dispute or not, the question shall be decided, by the Registrar, whose decision shall be final.

If the Registrar is satisfied that any matter referred to him or brought to his notice is a dispute within the meaning of the last preceding section, the Registrar shall decide the dispute himself or refer it for disposal to a nominee or a board of nominees appointed by him or any other authority competent to decide such dispute under the Maharashtra Co-operative Societies Act, 1960 (Mah. XXIV of 1961), and thereafter all the provisions of that Act relating to disputes, such as determination of disputes, appeals and enforcement of the decisions, awards or orders in such proceedings, shall, mutatis mutandis apply, as if it were a dispute within the meaning of and under that Act itself.

The provisions of section 156 of the Maharashtra Cooperative Societies Act, 1960 (Mah. XXIV of 1961) and the rules made thereunder shall apply to the recovery of any amount found due to a bank under the last preceding section.

1. (1) If a co-operative society is unable to pay its debts to a bank from which it has borrowed by reason of its members defaulting in the payment of the moneys due by them, the bank may direct the committee of such society to proceed against such members by taking all such action as is provided by the Maharashtra Co-operative Societies Act, 1960 (Mah. XXIV of 1961).
2. (2) If the Committee of the co-operative society fails to proceed against its defaulting members within a period of ninety days from the date of receipt of such direction from the bank, the bank itself may under intimation to the Registrar proceed against such defaulting members in which event, the provisions of the Maharashtra Co-operatives Societies Act, 1960 (Mah. XXIV of 1961) and the rules and the bye-laws made thereunder shall apply, as if all references to the society or its committee in the said provisions, rules and bye-laws were references to the bank.
3. (3) Where a bank has obtained a decree or award against a co-operative society indebted to it, the bank may proceed to recover such moneys firstly from the assets of the co-operative society and secondly from the members of the co-operative society to the extent of their debts due to the society.

The Registrar shall draw the attention of a bank financing a co-operative society to the defects noticed in every audit or inquiry or inspection conducted under the Maharashtra Co-operative Societies Act, 1960 (Mah. XXIV of 1961), and shall also supply to the bank a copy each of such audit, inquiry or inspection report, if demanded, in writing by it.