Govt amends Multi State Cooperative Societies Act to bring in transparency

Source: The post is based on the article “Govt amends Multi State Cooperative Societies Act to bring in transparency” published in the Business Standard on 13^th October 2022.

What is the News?

Recently, the Cabinet has approved the extensive amendments to the Multi-State Cooperative Societies Act (MSCS). The Act was last amended in 2002.

What are the Multi-state Cooperative Societies, and What is the need for this amendment?

India, at present, has nearly 800,000 cooperative societies of which around 1,600 are MSCS. They serve the interest of members in more than one state. These include some big names like IFFCO, Kribhco and Nafed.

What are the salient features of the amendment?

Make the functioning of the board transparent: This is done through processes such as registration becoming simpler and seats can be reserved for women, scheduled caste and scheduled tribe candidates in coop boards.

Formation of specific bodies: The Bill also has specific provisions for setting up

a) Cooperative Election Authority will be formed to conduct free, fair and timely elections to coops. This, in turn, will help reduce incidents of complaints and malpractices. There is a provision to debar offenders for three years to bring in more electoral discipline.

b) Cooperative information officer: S/he will enhance transparency by providing members timely access to information.

c) Cooperative ombudsman: The ombudsman will provide a mechanism for redressal of member grievances in a structured fashion.

To increase ease of doing business: The Bill proposes to reduce the period of registration, with a provision for the applicants to seek additional time of two months for rectification of mistakes.

Encourages a comprehensive digital ecosystem: The Bill provides for electronic submission and issuance of documents, thus providing for a comprehensive digital ecosystem.

Applicability: For cooperative banks, the banking functions will be governed by the Banking Regulation Act. However, for all other operational issues of such entities, the MSCS Act and its new amendments will be at play.