Chapter V FINANCE

(1) A Co-operative may mobilize funds including equity capital, deposits, grants, and loans from its members in such form, to such extent and under such conditions as may be specified in the articles of association. (2) A co-operative may raise funds and other forms of financial support including guarantee but excluding share capital from non-members including individuals, banks, other financial and non-financial institutions and the Government, on mutually agreed terms, to such extent and subject to such conditions as may be specified in the articles of association.

(1) The funds mobilized by a co-operative shall be for the furtherance of its objectives. (2) Such of its funds as are not needed for use in its business, a co-operative may invest or deposit, outside its business, in any manner specified in Section 11 (5) of the Income Tax Act, 1961.

(1) Surplus, if any, arising out of the business of a co-operative in a financial year may be used in one or more of the following ways: (a) towards a deficit cover fund; (b) to be distributed as surplus refund among its members; (c) to develop its business; (d) towards reserves and funds constituted in accordance with the articles of association; (e) to provide common services to its members; (f) to provide rewards or incentives to staff; (g) towards a non-divisible corpus fund; Provided that surplus arising out of services provided to non-members may not be distributed amongst members or staff, but may be used for the provisions of common services to the community at large, and for encouraging potential members to become members. (2) Surplus must be fully allocated at the annual general meeting in which the audited statements of accounts for the financial year in which the surplus arose are presented for the consideration of the general body.

(1) Deficit, if any, arising out of the business of a co-operative in a financial year, shall be fully settled by debiting a part or all of the deficit to the deficit cover

(1) A Co-operative may, in the interest of its members and towards the fulfillment of its objectives, create reserves and such other funds as are specified in the articles of association or resolved on by the general body. (2) Funds so created may be used in the business of the co-operative, but at the end of every year, on that portion of each fund which was not applied for the purpose for which it was created, the co-operative shall credit to the account of such fund an annual interest, not less than at the rate paid by scheduled banks on long term fixed deposits, debiting such interest as operational expenditure.

Notwithstanding anything contained in any law for the time being in force, any claim of the Government in respect of land revenue, any debt or other amount due to a co-operative by any member shall be a first charge upon such properties of the member as agreed to by the co-operative, and as the member may declare in the manner specified in the articles of association, at the time of membership, and subsequently thereafter.