CHENNAI: In the wake of repeated instances of malpractice and funds misappropriation in cooperative societies — government-funded and privately managed — the state government has enacted a law empowering the Registrar of Cooperative Societies (RCS) to immediately suspend the governing board of the societies involved in financial irregularities or other malpractices.
Previously, the RCS had to wait 30 to 60 days after issuing notices to the board of directors before appointing an interim administrator. However, a bill amending the Tamil Nadu Cooperative Societies Act, 1983 introduced by minister K R Periyakaruppan and adopted in the Assembly on Tuesday eliminates this delay.
Official sources said that in a few states, registrars of cooperative societies lack the authority to regulate societies which are not receiving any funds.
However, in Tamil Nadu, all cooperative societies, government-funded or functioning in private entities, fall under the jurisdiction of the RCS.
N. Subbaiyan, Registrar of Cooperative Societies, told TNIE that under the current system, notices are issued to the board of directors, granting them ‘reasonable’ time to respond before dissolution.
Immediate suspension
“During this period, the accused board retains authority, potentially compromising the process. The new legislation allows for immediate suspension, preventing further administrative interference or misuse of funds,” he said.
If investigations reveal no wrongdoing, the suspension will be revoked.
However, if misconduct is confirmed, the society will be dissolved and members will be disqualified following the standard procedure used for government employees.