Bill creates Co-operative Election Authority and Ombudsman

This Bill amends the Multi-State Co-operative Societies Act, 2002 to introduce new regulatory standards for capital and liquidity, establish a Co-operative Election Authority and a Co-operative Ombudsman, and tighten governance rules regarding board composition, director conflicts of interest, and share redemption.

Who it concerns: Multi-State Co-operative Societies, multi-State co-operative banks, their directors, members, and the Central Registrar of Co-operative Societies.

What the bill does

• Defines 'Authority' as the Co-operative Election Authority and 'Co-operative Ombudsman' appointed by the Central Government.
• Requires multi-State co-operative societies in thrift and credit businesses to meet specific paid-up capital, reserve, and liquidity norms; existing societies have a five-year transition period.
• Mandates the Central Registrar to dispose of registration applications within three months (extendable by two months for rectification), with deemed acceptance if deadlines are missed.
• Allows co-operative societies to merge into existing multi-State co-operative societies via a two-thirds majority resolution.
• Permits the issuance of non-voting shares to nominal or associate members, subject to Reserve Bank instructions for banks.
• Limits the board of directors to a maximum of 21 members, requiring at least one member from Scheduled Castes or Scheduled Tribes and two women, with up to two additional co-opted directors allowed.
• Prohibits directors from voting on or discussing contracts in which they or their relatives have an interest, and bans the recruitment of relatives of sitting directors as employees.
• Disqualifies directors who violate conflict of interest rules, deeming their office vacated and proceedings void.
• Bars members who were directors of a board that was superseded from being elected to another board for five years, provided they were found responsible for the supersession.
• Requires prior approval from specific authorities for the redemption of shares held by them, with redemption to be at face value.

Also in the document

• The Bill creates a new body, the Co-operative Election Authority, and appoints a Co-operative Ombudsman.
• It introduces specific disqualification grounds for directors, including being a director of an insolvent company or violating conflict of interest provisions.
• It mandates that registration applications not disposed of within the specified timeframe are deemed accepted.