Section 67 of The Multi-State Co-operative Societies Act, 2002
- (1)A multi-State co-operative society may receive deposits, raise loans and receive grants from external sources to such extent and under such conditions as may be specified in the bye-laws: Provided that the total amount of deposits and loans received during any financial year shall not exceed ten times of the sum of subscribed share capital and accumulated reserves: Provided further that while calculating the total sum of subscribed share capital and accumulated reserves, the accumulated losses shall be deducted. 1Explanation. -- For the removal of doubts, it is hereby clarified that a multi-State co-operative society shall not be entitled to receive deposits from persons other than voting members. (2) Subject to the provisions of sub-section (1), a multi-State co-operative society may accept funds or borrow funds for the fulfilment of its objects on such terms and conditions as are mutually contracted upon.
- (3)A multi-State co-operative society may issue non-convertible debentures or other instruments subject to the provisions of any law for the time being in force to raise resources for the fulfilment of its objects to the extent of twenty-five per cent. of its paid-up share capital.
Summary
- Section 67 of the multi-state co-operative law sets the rules and limits for how co-operatives can raise money through deposits, loans, grants, and other instruments.
- A multi-state co-operative society is allowed to receive deposits only from its voting members, completely banning deposits from the general public or non-voting members.
- The total deposits and loans a society takes in a single financial year cannot exceed a certain limit, which is a multiple determined by the Central Government of its subscribed share capital and accumulated reserves after deducting any accumulated losses.
- Under Section 67 of the Act, societies may issue non-convertible debentures, which are debt certificates that cannot be turned into ownership shares, or other instruments to raise resources up to twenty-five per cent of their paid-up share capital.
Practical examples
FAQ
1. Can a non-member make a deposit in a cooperative under Section 67 of the Multi-State Co-operative Societies Act, 2002?
No, under Section 67 of the Multi-State Co-operative Societies Act, 2002, a multi-state co-operative society is strictly barred from receiving deposits from any persons other than its voting members.
2. How are accumulated losses treated when calculating borrowing limits under Section 67 of the Multi-State Co-operative Societies Act, 2002?
Under Section 67 of the Multi-State Co-operative Societies Act, 2002, accumulated losses must be deducted from the sum of subscribed share capital and accumulated reserves when calculating the borrowing limits.
3. What is the maximum limit for issuing non-convertible debentures under Section 67 of the Multi-State Co-operative Societies Act, 2002?
Under Section 67 of the Multi-State Co-operative Societies Act, 2002, a multi-state co-operative society can issue non-convertible debentures or other instruments to raise resources only up to twenty-five per cent of its paid-up share capital.
4. Who determines the borrowing limits for a society under Section 67 of the Multi-State Co-operative Societies Act, 2002?
Under Section 67 of the Multi-State Co-operative Societies Act, 2002, the Central Government determines the multiples of the sum of subscribed share capital and accumulated reserves that the total deposits and loans received in a financial year cannot exceed.
Test yourself
Q1.Under Section 67 of the Multi-State Co-operative Societies Act, 2002, from which of the following categories of persons is a multi-state co-operative society legally permitted to receive deposits?
Q2.Under Section 67 of the Multi-State Co-operative Societies Act, 2002, what must be deducted when calculating the total sum of subscribed share capital and accumulated reserves to find the borrowing limit?
Q3.Under Section 67 of the Multi-State Co-operative Societies Act, 2002, a multi-state co-operative society can raise resources by issuing non-convertible debentures or other instruments up to what maximum limit?
Q4.Under Section 67 of the Multi-State Co-operative Societies Act, 2002, who is the authority responsible for determining the multiples of capital and reserves that restrict total annual deposits and loans?