RBI warns TS on coop banks
Says huge deposits in outstation banks are illegal
The Reserve Bank of India has alerted the Telangana state government regarding cooperative societies belonging to other states that are collecting large cash deposits from the public by offering abnormally high interest rates, and has directed that such activities be stopped.
The Central bank has cautioned the TS government against four cooperative societies belonging to Uttar Pradesh, West Bengal and Maharashtra collecting huge deposits in various districts in TS by offering high interest rates.
The RBI says the government must order the registrar of cooperative societies to carry out inspections of such cooperative societies and caution the public against dealing with these non-banking cooperative societies as well.
The RBI alerted the Telangana government that the following societies are operating in Telangana: Adarsh Multi-State Cooperative Credit Society Ltd, operating from Gurukrupanagar in Beed district in Maharashtra, Samruddha Jeevan MultiState Cooperative Credit Society, operating from Shivajinagar in Pune, Maharashtra, Sahara Credit Cooperative Society, operating from Aliganj in Lucknow, Uttar Pradesh and Oak India Multi-State Credit Cooperative Society operating from Kolkata, West Bengal.
Though these firms are registered as cooperative societies, they are into the business of chit funds, which is against the rules.
The Reserve Bank of India has alerted the Telangana state government regarding cooperative societies belonging to other states that are collecting large cash deposits.
These firms appoint collection agents in districts to collect deposits from the public, the RBI said.
It stated that there are several cases booked against these firms in various states for collecting deposits from the public under the guise of cooperative societies.
Minister for agriculture and cooperation, Pocharam Srinivas Reddy, said strict instructions have been issued to department officials to check illegal deposits in these cooperative societies.
“We took the RBI alert seriously. There will be periodic inspections of cooperative societies collecting deposits illegally. Strict instructions have been issued to officials to file criminal cases against those involved with these firms,” he said.
The RBI’s Department of Non-Banking Supervision (DNBS) held a meeting recently with officials of the cooperative department of states and alerted them about the fraudulent cooperative societies. The RBI is empowered to take punitive action, which includes cancellation of certificate of registration, etc.