Special provisions applicable to Co-operative Credit Societies

Notwithstanding anything contained in the Act, the following provisions shall apply to the Co-operative Credit Societies, namely:-

(1) (a) An associate member who is an individual or a group depositor holding a minimum deposit of Rs. 5,000/- (Rupees Five thousand only) in normal areas and Rs. 2,500/- (Rupees Two thousand and five hundred only) in scheduled areas or a higher sum as may be prescribed, for a continuous period of minimum two years preceding the date of notification of election in a Primary Agriculture Co-operative Credit Society shall have full voting rights.

(b) A group borrower, which is an associate member and availed a minimum loan of Rs. 10,000/- (Rupees Ten thousands only) or higher amount of loan as may be prescribed for at least 6 (six) months preceding the date of notification of elections in a primary agricultural Co-operative Credit Society shall have full voting rights.

(c) Every group borrower or a group depositor which is an associate member as described under section 20 shall be entitled to vote through one delegate nominated by the group.

(2) The Co-operative Credit Society shall have autonomy in all financial and internal administrative matters, subject to the guidelines of Reserve Bank of India/ National Bank for Agriculture and Rural Development in the following areas:-

(i) Interest rates on deposits and loans,

(ii) Borrowing and investments,

(iii) Loan policies and individual loan decisions,

(iv) Personnel policy, staffing, recruitment, posting, and compensation to staff, and

(v) Internal control systems, appointment of auditors and compensation for the audit.

(3) (a) The State Government‘s equity in a Co-operative Credit Society shall not exceed 25% of the paid up share capital. The State Co-operative Credit Society may reduce the State equity further at its choice.

(b) There shall be only Government nominee on the managing committee of the Telangana State Co-operative Bank/District Co-operative Central Bank as long as the equity of Government continues and there shall be no Government nominee on the managing committee of a Primary Agricultural Co-operative Credit Society:

Provided that the existing nominee(s) on the managing committee shall continue till the expiry of their current term. However, they shall not have any voting right in any election or in the motion of no confidence.

(4) (I) Any co-operative society registered under the provisions of the Act and wishing to convert itself into a co-operative society under the provisions of the Telangana Mutually Aided Co-operative Societies Act, 1995 may do so subject to the provisions of the said Act, 1995.

(II) A co-operative society registered under the Telangana Mutually Aided Co-operative Societies Act, 1995 and intending to convert itself into a co-operative society under this Act may do so following the procedure given below:-

(a) It shall frame bye-laws in accordance with the provisions of this Act;

(b) An application for registration shall be submitted to the Registrar by hand or registered post;

(c) Every such application shall be accompanied by,-

(i) the original and one copy of the bye-laws of the proposed co-operative society as adopted by the general body of the co-operative society registered under the Telangana Mutually Aided Co-operative Societies Act, 1995 which intends to convert itself into a co-operative society under the Act;

(ii) a true copy of the minutes of the general body meeting at which the proposed bye-laws were adopted, attested by a majority of the members of the committee of the co-operative society concerned; and

(iii) registration fee amounting to one percent of the total authorized share capital by whatever name called subject to a minimum of Rs. 1,000/- (Rupees one thousand only) and a maximum of Rs. 10,000/- (Rupees ten thousand only).

(III) The Registrar shall, if he is satisfied that;-

(a) the application is in conformity with the requirements of the Act;

(b) the proposed bye-laws are not contrary to the provisions of the Act; and

(c) the name of the proposed co-operative society is not the same as that of a co-operative society already registered under the Act, register the co-operative society and also its bye-laws and communicate by registered post a certificate of registration and the original of the registered bye-laws signed and sealed by him within a period of thirty days from the date of receipt of application from the applicant society.

(d) upon such registration, the registration made under the Telangana Mutually Aided Co-operative Societies Act, 1995, shall stand cancelled.

(IV) if the Registrar is satisfied that the requirements laid down in clause (III) are not fulfilled, he shall communicate by registered post, the order of refusal together with the reasons therefor, within thirty days from the date of receipt of application to the applicant society:

Provided that the elected management in office at the time of registration by conversion under the Act, shall be deemed to remain in office for the balance of the period of the term for which they have been elected under the law in force at that time.

(5) A Co-operative Credit Society registered under the Telangana Mutually Aided Co-operative Societies Act, 1995 may become a member of federal society registered under the Act. Similarly a Co-operative Credit Society registered under this Act may become a member of a federal society registered under the Telangana Mutually Aided Co-operative Societies Act, 1995.

(6) A Co-operative Credit Society may affiliate or disaffiliate with a federal society at its choice.

(7) A Co-operative Credit Society shall have the freedom of entry and exit at any tier and there shall be no mandatory restrictions of geographical boundaries for its operation.

(8) A Co-operative Credit Society may invest or deposit its funds in any financial institution regulated by Reserve Bank of India of its choice with a minimum net worth and any other criteria as may be prescribed by NABARD from time to time and not necessarily in the federal society to which it is affiliated.

(9) A Co-operative Credit Society may obtain loans from any financial institution regulated by Reserve Bank of India and refinance from NABARD or any other refinancing agency directly or through any RBI regulated financial institution of its choice and not necessarily from the federal society to which it is affiliated.

(10) The Registrar shall frame guidelines for payment of dividend by a PACS in consultation with NABARD.

(11) There shall be no compulsion in contribution to any fund other than Cooperative Education fund provided under this Act and those required for improving the net worth/ owned funds of a Cooperative Credit Society.

(12) (a) A number of managing committee representing a Co-operative Credit Society on the managing committee of APCOB/DCCB shall be disqualified by the Registrar in the event of such society committing a default for a period exceeding one year on intimation of such default by the Chief Executive of the bank concerned.

(b) A member of a managing committee representing a society other than PACS on the managing committee of APCOB/DCCB shall be disqualified by the Registrar in the event of such society committee a default for a period exceeding 90 (ninety) days on intimation of such default by the Chief Executive of the bank concerned.

(13) A defaulting member shall not be eligible to be elected to the managing committee of a Co-operative Credit Society and a defaulting office bearer of a PACS shall not continue on such managing committee for more than one year unless the default is cleared.

(14) The Registrar shall ensure that the regulatory prescriptions of the RBI in case of APCOB/DCCB including their winding up or supersession of their Managing Committee are implemented and the Liquidator/ Administrator(s), as the case may be, is appointed within one month of being so advised by RBI.

(15) (a) The supersession of the managing committee of APCOB/DCCB under section 34 of the Act shall be done only in consultation with the RBI.

(b) [xxx]