ROLE OF REGISTRAR OF COOPERATIVE SOCIETIES

Right from the Registration of a Cooperative Society till the cancellation

of its registration, the Registrar acts as friend, philosopher and guide to
the cooperatives and ensures that Cooperative Societies function in
accordance with the Cooperative Act. In fact the Registrar is "Trimurti" of
the Cooperative movement. The main functions of the Registrar are as
under:
1.
2.
3.
4.

Registration of Cooperative Societies;

Registration of amendments in the Bye-laws of Cooperative Societies;
Amalgamation, Division and re-organization of Cooperative Societies;
Ensure timely Election of the Managing Committee in Cooperative
Societies;
5. Conduct elections of Managing Committee in primary cooperative
banks and federal cooperative societies;
6. Ensure proper investment of funds by Cooperative Societies as
per Act and Rules;
7. Conduct audit, order inspection, enquiry and also fixing
surcharge on negligent functionaries of cooperative societies;
8. Settle disputes of Cooperative Societies through the process of
arbitration.
9. Function as an appellate Court;
10. Enforcement/execution of Orders, Awards and Decrees of various Courts;
11. Order winding up and cancellation of registration of defunct/nonfunctional societies.
12. Operating Cooperative Education Fund for training, education,
propaganda and publicity programme for the development of
Cooperative Movement in the NCT of Delhi.
13. To frame/amend Delhi Cooperative Societies Rules, 1973 from time to
time.
14. Issue Instructions/directives for the promotion of business of
different type of Cooperatives;
15.To approve proposals for enrolment, resignation and cessation of
membership in Housing Cooperative; and
16.To frame, execute and monitor various beneficiary schemes
approved by the Central /State Govts, including financial
assistance to various sectors of Cooperatives.

Role of RBI / NABARD and Co-operative Banks in Promoting Rural Credit

by GC Sen Banking

Role of RBI / NABARD and Co-operative Banks in Promoting Rural Credit!

Though the co-operative credit movement was made a special responsibility of the MI right from the
latters birth in 1935, much was not accomplished in this sphere till about the mid- 1950s. The real
turning point in the Banks role in the movement came only after the Banks All-India Rural Credit Survey
Committee submitted its monumental report in 1954.
The Survey Committee had found that while the co-operative societies and government provided only
3% each of the loans raised by the cultivator. The moneylender changed very high rates of interest and
did not concern himself with the purpose of the loan.
The Survey Committee summed up the position of agricultural credit thus It fell short of the right
quantity, was not of the right type, did not serve the right purpose and often failed to go to the right
people It also said that co-operation had failed but co-operation must succeed.
For this success, the Survey Committee recommended an integrated scheme of rural credit, of which
the main features were:
(i) State partnership in co-operative credit institutions through contribution to their share capital;
(ii) Full co-ordination between credit and other economic activities especially marketing and
processing; and
(iii) Administration through adequately trained and efficient personnel, responsive to the needs of the
rural population.
The RBI was assigned a crucial role in the scheme of integrated credit and in the building up of the cooperative credit organization. The consequent steps taken by the RBI in pursuance of the
recommendations of the Survey Committee and later committees like the Committee on Cooperative
Credit (1960) transformed the Banks role from that of a conventional central banker to that of an active
agency that takes all necessary measures for enabling the co-operative system to provide a growingly
larger share of rural credit.
The adoption of special programs for increasing agricultural production and the spread of green
revolution based largely on intensive use of fertilizers, water, better seeds, and machine power have
enhanced the RBIs responsibilities further. The RBI had also started offering greater financial
assistance to co-operatives for credit facilities to small farmers and other weaker sections and for
minimising disparities in the flow of credit to various regions.

With the setting up of the National Bank for Agriculture and Rural Development (NABARD) in July
1982, the RBIs functions relating to the co-operative movement have been taken over by the
NABARD.
Now, the RBIs role is primarily restricted to the provision of finance to the NABARD through its contributions to the two national rural credit funds, already transferred to the NABARD, and additional
loans and advances to the latter. Besides, the RBI still offers loans and advances to SCBs.
The NABARD measures are basically a continuation of the RBI measures.
They are studied below under two main heads:
(A) Provision of finance and
(B) Building up of the co-operative credit structure.
(A) Provision of Finance:
All the NABARD finance is provided to the co-operative sector through the SCBs. The bulk (almost 90%)
of it goes to finance agriculture. The finance is of all the three types, viz., short-term, medium-term, and
long-term.
(i) Short-term Agricultural Finance:
This is given primarily for seasonal agricultural operations which are interpreted to include mixed
farming activities, i.e., animal husbandry and allied activities jointly undertaken with agricultural
operations.
(ii) Medium-term Agricultural Finance:
The NABARD provides medium-term loans to SCBs for periods of 3 to 5 years. These loans are provided
for (a) agricultural purposes (purchase of agricultural machinery, sinking and repair of wells and tube
wells, etc.), animal husbandry, poultry farming and for purchase of shares of cooperative sugar
factories and other processing societies by agriculturists, and (b) conversion of short-term agricultural
loans into medium term loans whenever such conversion becomes necessary on account of wide-spread
crop failure as a result of drought, floods or other natural calamities. All medium-term loans are fully
guaranteed as to e repayment of the principal and the payment of interest by the state government
concerned.
(iii) Long-term Agricultural Credit:
Long-term credit for agriculture is provided mainly through investment in the debentures of SLDBs. In
addition, the National Bank makes long-term loans to state governments for contribution to the share
capital of co-operative credit institutions, most of which goes to strengthen co-operative credit for
agriculture. The financial accommodation of all kinds indicated above is provided at concessional rates
of interest which vary between the Bank Rate and up to 3% below the Bank Rate.

(iv) Non- agricultural finance:

The NABARD also provides short- term finance for:
(i) The production and marketing activities of selected cottage and small-scale industries (mostly
handloom weavers co-operative societies) and
(ii) The purchase and distribution of fertilizers.
The loans are generally provided through SCBs against guarantees of the state governments. However,
all such finance has constituted a small proportion (5 to 7 per cent) of the total Reserve Bank short-term
finance to cooperatives: the bulk of it goes to agricultural co-operatives.
During 1994-95, the total amount of financial assistance sanctioned by NABARD was about Rs. 5,300
crore. Of this, about Rs. 4,800 crore were short-term credit and Rs. 500 crore were medium-term credit.
The outstanding amount of financial assistance was about Rs. 3,700 crore.
(B) Building up of the Co-operative Credit Structure:
From around 1951 the RBI made efforts to (a) strengthen the co-operative credit structure at all the
three levels and (b) reorient the operational policies of cooperative banks in more purposive directions.
Under the former, the RBI had taken steps to get SCBs established in such states that did not have
them and strengthen them where they were weak. The RBI had also tried for the rehabilitation of
weak CCBs by prescribing action to recover over dues, strengthen the bad debts reserves and improve
the quality of the administrative and supervisory staff.
Similarly, the Bank played an active role in the reorganization of primary societies. The Bank had also
made arrangements for the training of personnel of co-operative departments and institutions and
undertaken periodical inspection of SCBs, CCBs, and SLDBs to promote healthy and sound growth of cooperative banking in the country. All these functions are now being performed by the NABARD.

EVOLUTION OF COOPERATIVES IN INDIA

The cooperative movement in India owes its origin to agriculture and allied sectors. Towards the
end of the 19th century, the problems of rural indebtedness and the consequent conditions of farmers
created an environment for the chit funds and cooperative societies. The farmers generally found the
cooperative movement an attractive mechanism for pooling their meagre resources for solving common
problems relating to credit, supplies of inputs and marketing of agricultural produce. The experience
gained in the working of cooperatives led to the enactment of Cooperative Credit Societies Act, 1904.
Subsequently, a more comprehensive legislation called the Cooperative Societies Act was enacted. This
Act, inter alia, provided for the creation of the post of registrar of cooperative societies and registration
of cooperative societies for various purposes and audit. Under the Montague-Chelmsford Reforms of
1919, cooperation became a provincial subject and the provinces were authorised to make their own
cooperative laws. Under the Government of India Act, 1935, cooperatives were treated as a provincial

subject. The item "Cooperative Societies" is a State Subject under entry No.32 of the State List of the
Constitution of India.
In order to cover Cooperative Societies with membership from more than one province, the
Government of India enacted the Multi-Unit Cooperative Societies Act, 1942. This Act was an enabling
legislative instrument dealing with incorporation and winding up of cooperative societies having
jurisdiction in more than one province. With the emergence of national federations of cooperative
societies in various functional areas and to obviate the plethora of different laws governing the same
types of societies, a need was felt for a comprehensive Central legislation to consolidate the laws
governing such cooperative societies. Therefore, the Multi-State Cooperative Societies Act, 1984 was
enacted by Parliament under Entry No. 44 of the Union List of the Constitution of India.
After India attained Independence in August, 1947, cooperatives assumed a great significance in
poverty removal and faster socio-economic growth. With the advent of the planning process,
cooperatives became an integral part of the Five Year Plans. As a result, they emerged as a distinct
segment in our national economy. In the First Five Year Plan, it was specifically stated that the success of
the Plan would be judged, among other things, by the extent it was implemented through cooperative
organizations.
The All-India Rural Credit Survey Committee Report, 1954 recommended an integrated approach to
cooperative credit and emphasized the need for viable credit cooperative societies by expanding their
area of operation, encouraging rural savings and diversifying business. The Committee also
recommended for Government participation in the share capital of the cooperatives.
In view of these recommendations, different States drew up various schemes for the cooperative
movement for organizing large-size societies and provision of State partnership and assistance. During
1960s, further efforts were made to consolidate the cooperative societies by their re-organisation.
Consequently, the number of primary agricultural cooperative credit societies was reduced from around
two
lakh
to
92,000.

Evolution
In 1958 the National Development Council (NDC) had recommended a national policy on
cooperatives. Jawaharlal Nehru had a strong faith in the cooperative movement. While opening an
international seminar on cooperative leadership in South-East Asia he had said " But my outlook at
present is not the outlook of spreading the cooperative movement gradually, progressively, as it has
done. My outlook is to convulse India with the Cooperative Movement or rather with cooperation to
make it, broadly speaking, the basic activity of India, in every village as well as elsewhere; and finally,
indeed, to make the cooperative approach the common thinking of India....Therefore, the whole future
of India really depends on the success of this approach of ours to these vast numbers, hundreds of
millions of people".

The cooperative sector has been playing a distinct and significant role in the countrys process of
socio-economic development. There has been a substantial growth of this sector in diverse areas of
the economy during the past few decades. The number of all types of cooperatives increased from 1.81
lakh in 1950-51 to 4.53 lakh in 1996-97. The total membership of cooperative societies increased from
1.55 crore to 20.45 crore during the same period. The cooperatives have been operating in various
areas of the economy such as credit, production, processing, ,marketing, input distribution, housing,
dairying and textiles. In some of the areas of their activities like dairying, urban banking and housing,
sugar and handlooms, the cooperatives have achieved success to an extent but there are larger areas
where they have not been so successful.
The failure of cooperatives in the country is mainly attributable to: dormant membership and lack of
active participation of members in the management of cooperatives.
Mounting overdoes in cooperative credit institution, lack of mobilisation of internal resources and
over-dependence on Government assistance,
lack of professional management.
bureaucratic control and interference in the management,
political interference and over-politisation have proved harmful to their growth.
Predominance of vested interests resulting in non-percolation of benefits to a common member,
particularly to the class of persons for whom such cooperatives were basically formed, has also retarded
the development of cooperatives. These are the areas which need to be attended to by evolving suitable
legislative
and
policy
support.

Get complete information on the Structure of Co-Operative

Banking In India
NUPUR SINGH
The Co-operative Credit Institutions in India can be classified as under:
From the chart, it can be seen that the organization of the Co-operative Credit Societies is pyramidal in
nature. It has a three-tier structure.
(i) Primary Credit Societies at the bottom.
(ii) Central Co-operative Bank at the middle,

(iii) State Co-operative Bank at the top.

That is, the primary societies are functioning in the various towns and villages, the Central Banks at the
district headquarters and the State Co-operative Banks at the state capitals forming the apex of the
system.
The Reserve Bank of India assist the co-operative structure by providing concessional finance through
NABARD in the form of General Lines of Credit for lending to agricultural activities. Thus, the whole
system is integrated with the Banking structure of the country.
Let us discuss about these institutions one by one.
(i) The Primary Agricultural Credit Societies:
A primary society is an association of borrowers and non-borrowers residing in a particular locality and
taking interest in the business affairs of one another. As membership is practically open to all
inhabitants of a locality, people of different status are brought together into the common organization.
The affairs of those organisation are managed by honorary secretaries and presidents assisted by
boards of directors, all these officials being elected from amongst the shareholders on the principle 'of
one man, one vote'. Most of the societies are organised and working on the principle of unlimited
liability.
The society may be started with ten or more persons of a village. In March 2001, nearly 1, 00,000 PACs
were operating in various states in India. They had a total membership of nearly 10, 00, 00,000 (Ten
Crore) as on that date.
Their deposit base is very poor at Rs. 13,481 crore as at end March 2001. Total outstanding loans of all
PACs are totally dependent on CCBs for their financial needs. NABARD has also been extending funds to
develop the infrastructure of PACs.
The primary society derives its funds from entrance fees, share capital, reserve funds deposit or loans
from non-members, from central and provincial co-operative banks and from the Government. The
deposits of the society may be either fixed, savings or recurring.
Unfortunately, the deposits of primary societies are not sufficiently large. The society provides shortterm credit to its members ordinarily on the personal security of the borrower with the personal surety
or sureties of other members. It may also lend on mortgages.
(ii) Central Co-operative Banks:
A Central Co-operative Bank is a federation of primary societies in a specified area. Where membership
of a Central Co-operative Bank is restricted to primary societies only, it is known as a 'banking union'.
Nowadays, individuals are also admitted as members of almost all Central Co-operative Banks.
Central Co-operative Banks are generally situated at the headquarters of district and have on their

boards of management, individuals of sufficient influence and business capacity in addition to

representatives of primary societies. The CCBs form an important part in the short-term structure of
Co-operative Credit Institutions.
As at March 2001 there were 367 district central co-operative Banks with 12580 branches in various
states in India. The total deposits of CCBs as at end March 2001 amounted to Rs. 61,786 crore as
compared to Rs. 54,248 crore in March 2000.
The CCBs also borrow money from NABARD for their operations. The recovery performance of CCBs in
March 2001,245 made profits while 112 CCBs made losses during 2000-2001.
A Central Co-operative Bank obtains its funds from share capital, reserve funds, deposits (current,
fixed, savings, recurring) and loans from the State Co-operative Bank or other joint stock banks.
Sometimes primary societies deposit their surplus funds with the Central Co-operative Banks to which
they are affiliated and this forms another source of funds for the Central Co-operative Banks.
Operation of the Bank
The primary business of Central Co-operative Banks consists of financing primary societies. In some
cases, they attract the surplus funds of certain primary societies, to supply the same to others. Thus,
Central Co-operative Banks Act as balancing centres to the primary societies.
Again, the deposits of urban areas are made available to the rural areas through the agency of these
banks. Although normally Central Co-operative Banks do not transact many a banking business as such,
they do it in Mumbai and Chennai.
The deposits with Central Banks have recently grown so great in volume that Central Banks are not able
to employ them within the co-operative movement.
They do not, as a rule, lend for commercial purposes and therefore are compelled to invest their funds
in Government Securities. However, with the growth of other types of co-operative movement these
funds may be absorbed by the various types of co-operative societies.
(iii) State Co-operative Banks:
At the top of the co-operative banking, there are State Cooperative Banks, organized with the object of
attracting deposits from the rich urban classes. These Banks are also more suitably equipped to serve
as channel between the co-operative movement and the joint stock banks.
There are at present 30 such banks. The constitution of these banks differs from one another, but
generally speaking, their membership comprises representatives of Central Banks as well as individual
shareholders. A logical development of these banks would have been the establishment of all-India Cooperative bank.
But there is no such institution, although the Indian State Co-operative Banks Association has been co-

ordinating their activities and performing certain services to all these Banks. NABARD maintains contact
with the State Co-operative Banks.
In addition to offering them rediscount facilities, collect and disseminate useful information regarding
co-operative movement. As at end March 2002, there were 30 SCBs with 831 branches in India.
The total deposits of all SCBs as at end March 2001 aggregated to Rs. 32626 crore as compared to Rs.
29557 crore in March 2000.
Among the states, Maharashtra mobilized maximum deposits of Rs. 9136/- crore, followed by Tamil
Nadu at Rs. 2745 crore. Tamil Nadu came third with Rs. 1635 crore of deposits in March 1997 of the 30
SCBs in 2001,23 made profits while 6 made losses during 2000-01.
Capital and Operation of the Bank
The State Co-operative Banks attract deposits from the richer urban classes and grant financial
accommodation to Central Co-operative Banks and through them to primary societies. They form the
only link between the co-operative organizations on the one hand and the money market and joint
stock banks on the other.
They are the balancing factors as between Central Co-operative Banks; for the transfer the surplus
funds available with some Central Banks to the needy ones.
The State Co-operative Banks derive their funds from share capital, reserve fund, deposit from the
public, loans from the State Bank, joint stock banks and deposits of surplus funds from some of the
Central Banks affiliated to them.
Generally speaking, it may be stated that the organization of the State Co-operative Banks is very
efficient and, in spite of competition from joint stock banks, they do very good business.
They are prohibited from transacting all types of commercial banking business and so their funds are
not at present being fully employed. With the growth of Co-operative movement these funds may in
due course be more effectively and efficiently employed within the movement.
Many a time's students get confused about the banking business and the principal reason for
establishment of different banking institutions at base level. Let us see the basic distinguishing features
of these banking institutions in the Co-operative Sector in India.
Co-operative Banks
Banks established under the co-operative system are called Co-operative Banks. These are State Cooperative Banks, Central Co-operative Banks and Primary Co-operative Banks. SCB is an apex level bank
for a state. CCBs are apex level banks for each district. Primary Cooperative Banks are rural or SemiUrban Level Co-operative Banks.
These are financial institutions whose primary objects are to provide credit facilities, i.e., loans and

advances to its member only. These societies are formed in large organizations or Government
Departments or at certain regions. The members are those working in the particular
organization/region. They collect subscriptions, deposits, etc., from members and loans from cooperative banks and extend credit facilities to its members only.
Primary Agricultural Credit Society
These are similar to credit societies explained above, but these credit societies can extend loans to its
members only for the purpose of agriculture connected activities.
Credit societies are not permitted to undertake all banking business. In other words, they cannot
provide cheque book facility to members and they cannot deal with persons other than their members.
While the RBI has overall control on all financial institutions, operational guidelines and control over cooperative banks are exercised by NABARD. The cooperative banks need to have a minimum paid-up
capital of Rs. 1 lakh only.