Joint panel submits report on coop law, dilutes provisions | mumbai | Hindustan Times
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Joint panel submits report on coop law, dilutes provisions

mumbai Updated: Jul 24, 2013 10:27 IST
HT Correspondent

Is it conflict of interest if your close relative runs a business that could benefit from a post you hold?

Dealing with recent controversies, the state’s politicians have decided that in case of a co-operative society or bank, you can be held accountable only if a member of your family, and not a close relative, benefits.

The 19-member joint select committee of the state legislature that submitted its report on the co-operative amendment bill on Tuesday made this recommendation along with several others, which will now be included in the ordinance.

The bill had a provision that anyone whose close relative is a dealer in goods or partner in a firm, which could benefit from the society or bank, cannot be its member.

The joint select committee has suggested that close relative — which is a larger term — be replaced with family.

The definition of family includes mother, father, son, daughter and their spouses.

The main reason why cooperative banks and societies go bust is handing out bad loans, many of which are given to firms, businesses run by relatives and friends of the board of directors.

Moreover, the report has also reduced the experience required for chartered accountants auditing the accounts of co-operative societies from three years to one year and for auditors from five years to three years.

Also, the housing society members do not require three year membership to get voting rights and are eligible to it when they become a member by buying a house.

The report has also kept the option of having your absence condoned, instead of losing your right as active members.

The bill had defined active members as those who attend at least one annual general body meeting of the society.

Failing to attend the meeting will make you a non-active member and you could lose your voting rights.