Co-operative Societies Act 1979 · 2020 Revised Edition · Part 6 · Property and Funds of Societies
68. Restrictions on borrowing
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A society may receive loans from persons who are not members of the society only to such extent and under such conditions as may be prescribed by its by-laws and in the Rules.
society
“society” means a co-operative society registered under this Act and includes a primary society, a secondary society and an apex organisation;
A credit society must not receive any deposit from any person other than a member of the credit society, or the member’s immediate family member to such extent and under such conditions as may be prescribed by its by-laws.
credit society
“credit society” means a society which is registered as a credit society;
A society which, under its by-laws, has power to borrow money is to determine from time to time at a general meeting —
by-laws
“by-laws” means the registered by-laws made by a society in the exercise of any power conferred by this Act, and includes a registered amendment of the by-laws;
the maximum liability which it may incur in loans from non-members; and
where the society is a credit society, the maximum liability which it may incur in loans or deposits from its members and their immediate family members.
Where the society is a credit society —
the maximum liability determined under subsection (3)(a) is subject to the Registrar’s approval; and
the Registrar may, at any time, reduce either or both of the maximum liabilities determined under subsection (3)(a) and (b) or impose such conditions (for either or both of those maximum liabilities) as the Registrar thinks necessary.
The Registrar must, before reducing either or both of the maximum liabilities determined under subsection (3)(a) and (b) or imposing any condition, give the credit society concerned —
Registrar
“Registrar” means the Registrar of Co‑operative Societies appointed under section 3(1), and includes a Deputy Registrar, an Assistant Registrar, or a public officer appointed under section 3(1), exercising such function, duty or power of the Registrar as is delegated to the Deputy Registrar, Assistant Registrar or public officer (as the case may be) under section 3(2);
notice in writing of the Registrar’s intention to do so; and
an opportunity to make written representations, within the time specified in the notice (being at least 14 days after the date of service of the notice), as to why the Registrar should not reduce the maximum liabilities or impose the condition, as the case may be.
The Registrar must issue the credit society a written notice of the Registrar’s decision whether to reduce either or both of the maximum liabilities determined under subsection (3)(a) and (b) or to impose any condition.
Where the Registrar decides to reduce either or both of the maximum liabilities determined under subsection (3)(a) and (b) or to impose any condition, the written notice in subsection (6) must specify a date at least 14 days after the date of the notice upon which the Registrar’s decision or condition is to take effect.
A credit society which is aggrieved by the Registrar’s decision under subsection (6) may, within 14 days after the date of the decision or such longer period as the Minister may allow in any particular case, appeal in writing to the Minister, whose decision is final.
If the credit society appeals to the Minister under subsection (8), the decision appealed against does not take effect unless the decision is confirmed by the Minister, or the appeal is withdrawn or is for any reason dismissed by the Minister.
In this section, unless the context otherwise requires —
“immediate family member” has such meaning as may be prescribed;
member
“member” includes an individual person or institution qualifying for membership in a co-operative society, who or which join in the application for the registration of a society, and an individual person or institution admitted to membership after registration in accordance with this Act, the Rules and the by-laws;
“loan”, in relation to a society, means —
the granting of an advance and other facility by a person to the society whereby the society has access to funds or financial guarantees; or
the incurring by the person of other liabilities on behalf of the society.