Regulations of loans to be granted by credit co-operative societies by Maharashtra Government.

1
Co-operative credit societies are credit
institutions characterized by member ownership
and control. It registered with the primary goal
of societal progress, they emphasize providing
accessible credit at fair interest rates. The
purpose of the co-operative credit society is to
deposit procurements from its members. Designed
to provide financial assistance to their members.
It helps to minimize additional expenses
associated with intermediaries in business.
Benefits from loans with favourable interest
rates. Registration in these societies brings
numerous advantages and financial security.
Credit co-operative societies are open to anyone
to join without any membership. These societies
are aided by the state and the national
government and are found in both rural and urban
areas. The rules of co-operative societies
are Regulation of loans to be granted by
societies In case of the grant of loans against
security of moveable or immovable property, the
lending society shall maintain such margin as the
Registrar may, with the approval of the Apex
Bank, by general or special order, direct from
time to time with reference to different
commodities, securities, or classes of societies.
(1) In the case of cash credit, the amount of the
loan shall not exceed such a multiple of the
owned funds of the borrowing society as may be
laid down by the registrar with the approval of
the concerned financing agency from time to time.
(2) It shall be lawful for a society to grant
loans without taking security of moveable or
immovable property if the purpose for which the
loan is given is considered production-worthy or
creditworthy and it is reasonably expected that
the loans will be repaid by the loanee. The
Registrar may, with the approval of the Apex
Bank, issue directions to societies to ensure
that creditworthy purposes indicated above
receive finance from the societies without any
difficulties on the one hand and without being
detrimental to the financial interests of the
societies on the other. (3) The Registrar may
recognize a central bank as the central financing
agency, which shall be primarily responsible for
financing credit requirements for all
creditworthy purposes through the concerned
societies in its jurisdiction. On such
recognition, such bank shall be responsible for
making all possible efforts to mobilize local
resources to make loans available to the
societies in its area. Such loans may be granted
for creditworthy purposes, giving due importance
to the requirements of various states of the
producers and cooperative societies with
reference to the linking up of credit with
cooperative processing or cooperative marketing.
(4) Except with the general or special permission
of the Registrar, the loan advanced to a member
by a society or to a society by a bank shall be
subject to such conditions as may be laid down by
the Registrar with the approval of the Apex Bank,
including the maximum amount to be advanced and
the period of repayment, both in regard to total
advances to members and societies as well as
against different types of securities. (5) No
society shall carry on transactions on credit or
sanction trade credit to its members or to
non-members except in accordance with the general
directions that may be issued by the Registrar on
that behalf. (6) In the matter of grant of loans
to societies by Central Banks or to members by
Primary Societies, the Registrar may lay down
with the approval of the Central Banks, the
procedure regarding receiving applications,
assessing credit needs, making inquiries in
respect of the production programme for which
such loan is required and the procedure for
finally sanctioning the loan as also the rates of
finance to be followed from year to year and the
nature of inquiries to be made for the purpose of
financing of different crops and imposition of
certain conditions regarding proper utilisation
of loan and sale of agricultural produce through
specified co-operative organisation, before such
finance is granted. (7) The Registrar may, with
the approval of the Apex Bank, by general or
special order, prohibit or regulate the grant of
loans by a central bank or a society where such
grant is considered neither in the interest of
the society nor in the interest of the
development of co-operative movement on sound
lines.
2
Conditions to be complied with by members
applying for loans (1) Every member of a
society applying for a loan from the society
shall be required to hold shares in such manner
and in such proportion to the amount of loan
applied for by him as may be specified in the
by-laws of the society. (2) Subject to the
maximum limit specified in the by-laws, a loan to
be granted to a member of a resource society and
the period of its repayment shall be in
accordance with the standard laid down by the
Registrar in consultation with the Central Bank
and the Federal Society. A loan in excess of the
maximum amount may be granted to a member with
the previous sanction of the Central Bank and the
Federal Society to which the society is
affiliated, provided that where the amount of the
loan exceeds twice the maximum limit contained in
the by-laws, prior sanction of the Registrar
shall also be obtained. . Credit limits by
non-credit societies (1) No society whose
objects do not include the grant of loans or
financial accommodation to its members shall
grant loans or sanction credit to any member
without the sanction of the Registrar. Provided
that any society that has, as one of its objects,
the supply of goods or services required by
members for production purposes may supply goods
or provide services on credit against sufficient
security on the condition that the cost of the
goods supplied or services provided shall be
recoverable from the amount of the sale proceeds
of the agricultural produce or other goods
produced by the member. (2) A consumer society
may sell goods on credit to its members and other
customers up to the extent of deposits received
from them. Restrictions on borrowing from more
than one credit society (1) Every person who is
a member of more than one resource society (other
than a Land Development Bank, a Central Bank, or
a marketing society) dispensing credit shall, if
he has not already made one, make a declaration
in Form that he will borrow only from one such
society to be mentioned in the declaration and
shall send a copy of such declaration duly
attested to all societies of which he is or has
become a member. (2) Any person who continues to
be a member of more than one such society without
complying with the provision of this rule shall
be liable to be removed from the membership of
any or all such societies upon receiving a
written requisition from the Registrar to that
effect, provided that the society from which a
person has borrowed may permit him to borrow from
any other society of which he is a member to such
extent and subject to such conditions as may be
laid down by it. (3) The Registrar may, for
reasons to be recorded in writing, exempt any
person or persons from the operation of this rule
or prohibit any person or persons from borrowing
from more than one society, notwithstanding that
permission of the society under proviso to
sub-rule (2) has been obtained by him. Limits on
loans against fixed deposits (1) When a society
makes a loan to a depositor on the security of
his fixed deposit with the society, the amount of
the loan shall not exceed 90 percent of the
deposit amount, and the period for which the loan
is granted shall not extend beyond the date of
maturity of the fixed deposit. Also, ShreeCom
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