MHA carries out several amendments in Act
*Govt to supervise societies’ autonomy in all matters
Mohinder Verma
JAMMU, Oct 8: Union Ministry of Home Affairs (MHA) has inserted new provision in the Jammu and Kashmir Cooperative Societies Act, 1989 for the revival of the ailing Cooperative Banks by strictly implementing the packages sanctioned by the Government of India or the Government of Union Territory through Professional Boards.
This as well as other amendments have been made by way of Union Territory of Jammu and Kashmir Reorganization (Adaptation of State Laws) Third Order, 2020 issued in exercise of the powers conferred by Section 96 of the J&K Reorganization Act, 2019.
Under Section 30 of the J&K Cooperative Societies Act, which deals with transitory provision for revival of certain Cooperative Banks, there was no provision for constitution of Professional Boards but the Ministry of Home Affairs has inserted a new Clause in this regard.
The new Section 30-B read: “Notwithstanding anything contained in Section 29 or Section 30 or any other provision of the Act, the Government may constitute such Professional Boards, as may be necessary, for managing the affairs of the Central Cooperative Banks including Anantnag Central Cooperative Bank Ltd; the Baramulla Central Cooperative Bank Ltd and the Jammu Central Cooperative Bank Ltd”.
The Professional Boards will implement the revival package(s) sanctioned by the Government of India or the Government of the Union Territory of Jammu and Kashmir so as to enable these Central Cooperative Banks to achieve a Capital Risk Adequacy Ratio (CRAR) as may be required.
From the date of constitution of such Professional Boards, the existing Board of Directors or Board of Management of the concerned banks shall cease to exist and the Professional Boards will manage the affairs of these banks for a period of two years or such other period as may be specified by the Government from time to time taking into consideration the impact of revival package and financial health of these banks.
Moreover, for managing the affairs of the Cooperative Banks, the Government or the Professional Boards will be able to appoint Managing Director or such officers for such period and on such terms and conditions as may be determined by the Government or the Professional Board.
Even a clause has been inserted in Section 30-A due to which the Board of Management or the Administrator appointed to manage the affairs of any society before the commencement of the Jammu and Kashmir Reorganization (Adaptation of State Laws) Third Order, 2020 may continue to manage the affairs of the society concerned for a period not exceeding two years from the said Constitution.
Earlier, there was provision that such Board of Management or the Administrative may continue to manage the affairs of the society concerned for a period not exceeding one year from the date of appointment.
The latest clause is subject to the proviso which read: “Provided that where the Board of Management has ceased to function before the commencement of the Jammu and Kashmir Reorganization (Adaptation of State Laws) Order 2020 or where the society is in default or in negligent to the performance of duties imposed on it by the Act or the Rules or Bye-laws made thereunder or has committed any act which is prejudicial to the interest of the society or its members, the Government may appoint Administrator or Transitory Board for two years or such period as may be determined by the Government”.
Even Section 32-A has been amended and now a Cooperative Credit Structure Society will have autonomy in all financial and internal administrative matters subject to provisions of the Act, Rules or Bye-laws as well as to overall supervision and control of the Government.
This means that Government will have overall supervision and control over the Cooperative Credit Structure Society even though the Society will have autonomy in all financial and internal administrative matters including the areas of interest rates on deposits and loans provided that in case of the State Co-operative Bank and a Central Co-operative Bank, the interest rates shall be in conformity with the guidelines issued by the Reserve Bank; borrowing and investments; loan policies and individual loan decisions; personnel policy, staffing, recruitment, posting and compensation to staff; internal control systems, appointment of auditors and compensation for the audit.
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