In view of the increasing number of scams in the co-operative societies resulting in non-payment of dues of the depositors, the Maharashtra regulatory board has decided to cap the interest rate to be offered to the depositors at 9.50 per cent per annum.
The interest rate has been capped to keep an eye on the exploitation of depositors.
Secretary of the Regulatory Board and deputy registrar (Credit Societies) had issued an order that would be implemented with retrospective effect from August 1.
The order would be applicable only to deposits that have been accepted by co-operative credit societies from August 1.
The decision will likely provide stability to the co-operative credit societies and incidents of the societies would be brought down. This decision will also help to put an end to competition among the co-operative societies.
The new rate of interest on non-mortgaged loans would be 15 per cent. The maximum rate of interest will be capped at 13 per cent if the co-operative societies are disbursing loan from their own corpus.
While if the society has borrowed money from other financial institutions to be disbursed as a credit to other entities, then the rate of interest chargeable would not be more than 15 per cent or two per cent more than the rate of interest paid by it to the said financial institution, whichever is smaller.
The said decision is not applicable to multi-state co-operative credit societies as the Co-operation Department of State government does not have any control over them. Now, it remains to be seen what stance the newly created Co-operation Department in the Centre adopts in this regard.