Demonetization Effect On Co-operatives:

The co-operative sector hit worst by the choice remains attempting to pass though the Demonetization shock.

Besides the real issues of the world, efforts by corrupt politicians attempting to use the channel of co-op banks to exchange their black cash conjointly created headlines for months along. The DCCBs, that area unit largely controlled by the ruling parties across states, were abundant in news.

 The states of Kerala, state and Uttar Pradesh flattop the chart as impotency and IT sleuths brought them underneath their scanner.

 Media reports same prohibited notes value Rs. 57, 49, 500 were deposited into varied accounts between November eight and November fifteen, 2016 in six cooperative banks in Kerala as Kerala’s UDF MPs and MLAs hurried to metropolis to debate the problem of ending and therefore the crisis moon-faced by cooperative banks.

 Unusual amounts of unexplained currency were conjointly deposited in cooperative banks across districts in West Bengal, reportable media. The number bumped into many thousand crores. The banks that meted out irregular transactions enclosed Raiganj cooperative bank, Hooghly district cooperative bank, Midnapore Vidyasagar cooperative Bank, and banks of Malda and East Midnapore together.

 Until Gregorian calendar month, thirteen concerning Rs 1,000 large integer were deposited in three hundred branches of seventeen central cooperative banks. Most of the benefit these banks came in from 5,000 primary cooperative societies.

 However, credit co-ops that were doing business honestly were conjointly worst hit. The CEO of the most important credit co-operative within the country Buldana Urban has created associate earnest request to Prime Minister Narendra Modi to assist arrest the plummeting confidence of individuals within the fifty thousand-credit co-operatives active within the country.

 In addition, with credit co-ops quite eight to ten large integer individuals coupled to them additionally suffered a way or the opposite. Sufferers additionally enclosed concerning one large integer those who ar utilized within the sector unfold across the country.

Co-Operative Business Model

Understanding and awareness of the cooperative business model is distributed, however the potential for folks to decide on cooperatives over standard businesses is promising.


Millennials square measure obsessed on building a much better world, and at identical time, expect corporations to try to do over simply build a profit. Our job is to supply the cooperative business model because the resolution to society’s needs!

Types of Cooperative Societies:

  • A Society is categorized on the idea of its objects. There are numerous forms of societies that may be formed below the Act below that it’s registered:
  • Under Maharashtra Co-Operatives Societies Act, 1960 following types of Societies can be registered :
  • Agricultural Marketing Society
  • Consumer Society
  • Co-Operatives Bank
  • Central Bank
  • Crop Protection Society
  • Farming Society
  • General Society
  • Housing Society
  • Federal Society
  • Irrigation Society
  • Process Society
  • Producers Society

3 Fundamentals of Co-Operative Society:

The prime objectives, additionally to the 3 fundamentals of Co-Operative mentioned higher than area unit to form offered the products and services in needed amount, of higher quality and at an inexpensive worth to its members.



The Union of Republic of India and therefore the several government undertake developments comes that area unit altogether in hand by either the Central Government or the government.


Which could be a sector wherever non-public enterprises area unit permissible in bound fields of economic activities.


Which is superbly emulsified in between a public sector and therefore the private sector. Its edges of each the sectors and drawbacks of neither of them.

Co-Operative Movement in India:

  • In spite of the drawbacks skilled within the operating and administration of the Co-Operatives societies, they have positively contributed to the expansion and development of the economy.
  • The orientations of commercial organization and Co-Operatives organizations are basically different.
  • In a commercial organization, earning and maximizing the profits is the sole motive

Profits and Returns from Co-Operative Societies:

Co-Operatives Society is Associate in nursing association of members and bound proportion profits attained by the society, as set within the meeting of the final body are going to be distributed within the type of dividend to the members.


  • Irrespective of the holding, every member has only 1 pick out the decision-making within the General body meeting or at the time of election of the committee for management.
  • The shares don’t seem to be listed in the securities market.
  • The State Co-Operative. Act conjointly prescribes the utmost quantity that a member will hold as a share capital in any society.
  • Under M.C.S. Act, 1960 as per Section twenty eight apart from Government or different society, shall not hold a lot of than 1/5 of the full capital or interest in shares or extraordinary Rs. 20,000/- that the authorities power to alter by manner of notification.

Cooperative Societies and Democratic Controls:

The management of a Co-Operatives enterprise in not within the hands of capitalists World Health Organization will corner the share capital and management the interest in any enterprise which might be a non-public enterprise.

In Co-Operatives Sector, the principle of “One man one Vote “is provided within the statute therefore on guarantee that the capital doesn’t dominate the administration of Co-Operatives Society.

 As the Society is functioning on democratic principle and therefore the workplace bearers of the Society are going to be Functioning sort of a trustees for the higher management of the society and there’s no separate edges to the executive committee members.

Service is that the main slogan and therefore the profit isn’t the most concern in Co-Operatives societies.


A Co-Operatives Society could be a body company registered below the applicable state Act with perpetual succession having a typical seal.

It will acquire, hold and eliminate properties, enter into contracts and it will ask and it will be asked.


Co-Operatives Society is basically a company or Associate in Nursing association of persons United Nations agency have return together for the common purpose of economic development or for mutual facilitate.


The Co-Operatives society’s workplace bearers/executive committee is elective as per democratic election procedure.

The Co-Operatives Society operate below the principle of self-facilitate and mutual facilitate that means every can facilitate for themselves and every one can facilitate others.

How A Cooperative Software Functions?

  • Co-Operatives Societies Act underneath that a similar is registered.
  • Co-Operatives Societies rules created there underneath
  • Bye-laws approved by the registrar at the time of registration and amendments made of time to time and approved by the registrar.
  • Notification and Orders


We have a number of Co-Operatives Societies Acts functional in different states like

  1. Maharashtra Co-Operatives Societies Act, 1960, – Pondicherry Co-Operatives Societies Act, 1972
  2. Karnataka Co-Operatives Societies Act, 1959
  3. Delhi Co-Operatives Societies Act, 1972
  4. Kerala Co-Operatives Societies Act etc.

When the world of operation is restricted to at least one state, the State Co-Operatives Act Rules, beneath that the society is registered are applicable.

In a specific state, if Co-Operatives Act and Rules isn’t enacted, the Central Act that is understood because the Co-Operatives Act, 1912 and its rules are applicable. When the world of operation of Society is unfold in 2 or additional states. The Multi-State Co-Operatives Societies Act, 2002 and its rules shall be applicable.


  • Each society also registered with the bye-laws for internal management of the societies duly approved by the registrar at the time of registration of the society.
  • The bye-laws of a society constitute a contract 4 between a member and the society and it provide for the management of the society.
  • The bye-laws are framed within the provisions of the Act and the rules made there under.
  • Bye-laws include the objects of the society and completely define and restrict the society’s activities
  • But the rights and liabilities of members are determined by the Act and Rules and not by the bye-laws as such.
  • Notification and Orders issued from time to time by the Government, or any other Authority as prescribed under the Act, Rules there under.

Why Cooperative Societies are needed for people?

  • The term Co-Operative comes from the Latin word Co-Operative, wherever the word co means that ‘with’ and operative means that ‘to work’. Thus, Co-Operative means that operating along.
  • So people who need to figure alongside some common economic objective will type a society that is termed as “Co-Operatives society”.
  • It is a voluntary association of persons who work together to promote their economic interest.
  • It works on the principle of self-help as well as mutual help.
  • The main objective is to provide support to the members.
  • Nobody joins a cooperative society to earn profit.
  • A Co-Operatives society could be a special form of business concern completely different from alternative kinds of origination you’ve got learnt earlier. Allow us to discuss its characteristics.

 Open Membership:

The membership of a Co-Operatives Society is hospitable all those that have a standard interest.

Voluntary Association:

Members be a part of the Co-Operatives society voluntarily, that is, by choice. A member will be a part of the society as and once he likes, continue for as long as he likes, and leave the society at can.

State control:

  • To protect the interest of members, Co-Operatives society’s square measure placed beneath state management through registration.
  • While obtaining registered, a society must submit details concerning the members and therefore the business it’s to undertake.
  • It has to take care of books of accounts, that square measure to be audited by government auditors.

Sources of Finance:

In a Co-Operatives society capital is contributed by all the members. However, it can easily raise loans and secure grants from government after its registration.

Service motive:

Co-Operatives are not formed to maximize profit like other forms of business organization

The main purpose of a Co-Operatives Society is to provide service to its members.

  Formation of a cooperative society:

  • A Co-Operatives Society can be formed as per the provisions of the Co-Operatives Societies Act, 1912.
  • At least ten persons having the capacity to enter into a contract with common economic objectives, like farming, weaving, consuming, etc. can form a Co-Operatives Society.
  • A joint application along with the bye-laws of the society containing the details about the society and its members, has to be submitted to the Registrar of Co-Operatives Societies of the concerned state.
  • After scrutiny of the application and the bye–laws, the registrar issues a Certificate of Registration.

 Requirement for registration:

  • Application with the signature of all members
  • Bye-laws of the society containing:
  • Name, address and aims and objectives of the society;
  • Names, addresses and occupations of members;
  • Mode of admitting new members;
  • Share capital and its division.
  • Easy Formation
  • Open Membership
  • Democratic Control
  • Limited Liability
  • Elimination of Middlemen’s Profit
  • State Assistance
  • Stable Life