Credit societies may get insurance protection soon

Mumbai: Credit societies across the state will soon have insurance protection from the government like district cooperative banks. There are 15,000 credit societies in the state with Rs 25,000 crore in deposits. In the absence of protection, many of the depositors did not get their deposits back when credit societies came under financial crisis.

Cooperative minister Subhash Deshmukh said that the latest decision to insure credit societies, mostly related to the farming sector, will be applicable to all 15,000 organisations. “There are 15,000 credit societies in the state with Rs 25,000 crore deposits. But they do not get insurance protection like district cooperative banks. So if the societies come under problems, depositors do not get protection for their deposits. Hence, there was a demand to protect deposits.” he said.

Deshmukh said that the cooperative infrastructure/system had lately been under stress due to a financial crunch. Hence, there was an urgent need to support the cooperative infrastructure in various sectors, especially insure it against risk.

A proposal in this regard had already been chalked out and the department would submit it before the state cabinet in the next meeting for a final nod, he said. The demand for insuring cooperatives was put forth by the federation of cooperatives headed by president Kaka Koyte, who had been petitioning the government for a better support system for cooperatives.

Earlier, the Maharashtra government had asked all cooperative societies to contribute 20 per cent of their profits towards ‘public purposes’ and strengthening of other smaller societies. The new rule was made applicable to all cooperatives except housing. The government said that the chunk of revenue generated would be used for social causes.