THIRUVANANTHAPURAM: The state government has decided to amend the Kerala Cooperative Societies Act of 1969 to add more teeth to prevent malpractices in cooperative societies. Amended provisions will equip the government to freeze movable and immovable assets of the accused in financial frauds, Cooperation Minister V N Vasavan has said. The law reforms commission has been asked to review the act and propose amendments within two months.
All cooperative bank secretaries have been directed to file police complaints whenever cases of loan fraud, fake gold ornament pledging and other financial irregularities come to their notice. The decisions were taken in view of the `300-crore loan fraud in the Karuvannur Service Cooperative Bank in Thrissur. The minister has also directed the registrar of cooperative societies to conduct quick and random inspections in cooperative societies to check fraudulent practices.
A decision to strengthen the vigilance wing of the cooperative department was also taken. To equip the vigilance wing to report the noticed crime directly to police, amendments will be brought in the Cooperative Societies Act and in CrPC. The cooperative vigilance wing will have permission to conduct surprise checks at any cooperative society. The audit wing of the cooperative department will be made an independent section so that auditors won’t be influenced by officials and political leadership.
A senior official from the Indian audit and account service will be appointed on deputation to head the audit wing. Integrated banking software with high-security features for all cooperative banks will be introduced.
The minister said the government would take every possible step to protect the interests of investors of Karuvannur bank. The three-member panel appointed to probe the fraud has been asked to suggest a reorganisation package for the liabilities of the bank. The panel will submit its report this month itself and the government will finalise a scheme to pay back investors based on this report. The government has also decided to conduct special audits in all cooperative societies having working capital of `250 crore or more.
Vigilance wing to be strengthened
Law reforms commission has been asked to review the Kerala Cooperative Societies Act of 1969 and propose amendments within two months. A decision to strengthen the vigilance wing of the cooperative dept has also been taken