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Rajasthan CM Ashok Gehlot writes to PM Narendra Modi, wants control over cooperative societies

Gehlot argued that recent amendments placing multi-state Cooperative Societies under the Centre's control were contrary to the basic spirit of the cooperative movement in the states.

Published: 22nd October 2020 11:20 AM  |   Last Updated: 22nd October 2020 11:20 AM   |  A+A-

Rajasthan CM Ashok Gehlot

Rajasthan CM Ashok Gehlot (Photo | PTI)

Express News Service

JAIPUR: The issue of control over cooperative societies and banks has sparked a tug of war between Rajasthan Chief Minister Ashok Gehlot and the central government.

In a letter to Prime Minister Narendra Modi, Gehlot has strongly objected to the amendments made in the provisions of the Banking Regulation (BR) Act in September 2020 whereby effective control has been given to the RBI.

Gehlot argues that these amendments will adversely affect the basic spirit of Cooperative Banks and the entire cooperative movement in the states. CM Gehlot has urged the PM to reconsider the said amendments and restore the earlier system.

In the past few years, Rajasthan has been rocked by several scams  in cooperative societies and recently the name of union Jal Shakti minister Gajendra Singh Shekhawat had also surfaced in a cooperative scam.

Through a series of tweets, Gehlot revealed the broad tenor of his letter to the PM regarding Multi State Cooperative Societies and Banking Regulation Act. He argued that recent amendments placing multi-state Cooperative Societies under the Centre's control were contrary to the basic spirit of the cooperative movement in the states.

In his letter to PM Modi on October 19 , Gehlot  has strongly objected to the amendments made in the Banking Regulation Act on September 16, 2020  giving the control of cooperative societies to the Reserve Bank of India ( RBI ).

Gehlot claims the recently amended provisions of Banking Regulation Act are against the basic principles of cooperatives and would have a negative impact on the functioning of State Cooperative Banks and has asked PM Modi to withdraw these amendments .

"Under the new provisions, all administrative control of the Co-operative Banks has been given to the RBI. As a result, the administrative control of the co-operative banks under the state government will go under RBI, which is an encroachment on the principle of co-operatives.

Under amended provisions, the principle of one member one vote does not hold any longer. The previous structure and provisions must be restored in the interest of cooperatives," said Gehlot in a statement.

Gehlot claims that the move has made the Rajasthan Co-operative Societies Act 2001 (which is responsible for managing and monitoring co-operatives) irrelevant. "The amendment will adversely affect the basic spirit  of the cooperative banks and the cooperative movement in the state," reads a statement by Gehlot.

He also points out that a large number of common people have invested in Multi State Cooperative Societies operating in the state and the Rajasthan police have received complaints from around 73 thousand investors regarding irregularities amounting to Rs 1419.77 crore.

As such, Gehlot has asked PM Modi to initiate remedial measures by "directing the Central Registrar to authorise State's Cooperative department to take action in the matter in order to save the interests of common people".

Gehlot's concern on the issue has been preceded by crores of investors in Rajasthan losing their hard-earned money in a series of scams connected to Cooperative Societies. Hundreds of crores have been embezzled by Adarsh, Navjivan and Sanjeevani Credit Cooperative Societies and last year the State Cooperative department had  cancelled registration of 7 credit cooperative societies.

Cases of fraud by three big credit societies in Rajasthan had been exposed by the Special Operations Group (SOG) of the Rajasthan police who had arrested Vikram Singh, the owner of the dubious Sanjeevani Credit Cooperative Society for allegedly siphoning off over a thousand crores.

In  the complaint related to Sanjeevani Credit Cooperative Society, the complainant  had named Union Jal Shakti minister and Jodhpur MP Gajendra Singh Shekhawat and others as the alleged accused in the scam and sought further investigation by the SOG into their role.

Shekhawat, his wife and other partners had been named in the complaint in the Sanjivani Credit Cooperative Society scam in which around 50,000 investors allegedly lost about Rs 840 crore.



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