FAQ on multi state co-op credit society

How does co-op Society utilize the funds/deposits Collected by them ?

The co-op Society uses the funds in giving loans to the members and if surplus remains then invest as per the Co-operatives society Act / Rules / By-Laws. They give loans directly to person or business for small and midium purpose under diffrent heads like Housing Loan, Gold Loan, Vehical Loan, Personal Loan, Business Loan, Food Grain Loan, Consumer Loan. EMI is fix by co-op society for members and full proof agreement on stem paper are done for loan.

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Are the deposits with the co-op Society Safe & Secured?

Yes, because Government of India has framed the laws / rules to ensure the security and safety of deposits and Credit Co-Operative Society strictly abides by the rules and regulations framed by Central Government. co-operative Society has to follow the co-op society act or Multi State Co-Operative Societies Act, 2002.

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What is the difference between Multi State Credit Co-Operative Society and Financial Companies?

Multi State Credit society is registered under Multi state Co-Operative societies act and rules. co-operative Society is not a personal institution owned by an individual but is a fully democratic organization managed by Board Of Directors who are elected by the members of the society in the Annual General Meetings and the Board Of Directors also take decisions in a collective manner with total transparency. The Department of Co-Operatives constantly reviews the functioning of the society at regular intervals. Finance companies are usually owned by individuals and frame the so called policies according to the owners. The general members/ depositors/ Investors have no role to play. There are some possibilities of the absence of transparency. Members/ Investors have virtually no knowledge of the affairs/legal provisions.

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Difference between Multi State Credit Co-Operative Society and Banks?

1. Banks works as per the rules of Reserve Bank of India while Society works as per the Co-op. act.
2. Audit of Bank is done by the panel of C.A. or R.B.I. officers as per the guideline of Reserve Bank of India, while in society auditors from the registrar office of co-op. society came for audit purpose.
3. Banks can issue cheque books because they have clearing house's license, while society don't have clearing house license so can't issue cheque books.
4. When anybody wants to do transaction with society first of all he/she has to become member of co-op society & have to purchase the shares of it than & than can take loan & put deposits in society. While in Banks without become member & purchase the shares you can take loan & also put FD & other deposits.

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What is Non-Banking Financial Company ? (NBFC)

DEFINITION of 'Non-Banking Financial Company - NBFC' NBFCs or Non-banking financial companies are financial institutions that can provide banking services, but do not hold any banking license. These institutions are not allowed to take deposits from the public. but all operations of these institutions are still covered under banking regulations

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