PO V Interview Materials

IBPS PO V Interview Material

Credit Co-Operative Society

In India credit co-op. sector developed to help the peoples of low income group whom banks
generally do not gives loans because of risk, they are taking loans from the financiers at high
interest rates.
So society is the better option to help them. Society generally gives a wide range of banking and
financial services like Loans, F.D., R.D., Saving, Insurance etc.
Generally Co-operative Credit Society is formed by members, who are at the same time the
owners and the customers of their Society.

All credit Society than starts Deposit schemes like Member, Saving Account, Compulsory Saving,
Fix deposit (FD), Recurring Deposit (RD), Monthly Recurring (MR), Daily Deposit (DD), Pension
schemes etc. After collecting money from depositors they start giving loans with name Housing
Loan, Vehicle Loan, Gold Loan, Festival Loan, General Loan, Consumer Loan, Agriculture Loan
etc. and decide the Loan EMI.
This Societies give high return on deposits schemes and give loan at reasonable rate of interest
as they have low running cost and every year declare Dividend for its members.

RBI and Nabard give heavy fund to all agriculture society to give loan for farmers at very low
rate of interest

The Mirdha Committee in 1965 laid down standards to determine the genuineness of
cooperative societies and suggest measures to weed out non genuine societies; to review the
existing cooperative laws and practices to eliminate vested interest.
The recommendations of the Committee resulted in amendments in the cooperative legislation
in most states, which destroyed the autonomous and democratic character of cooperatives.

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 PO V Interview Materials

What is the difference between co-operative Society and a business

enterprises?
Co-operatives are enterprises that put people at the center of their business, not capital. Co-
operatives are business enterprises and thus can be defined in terms of three basic interests:
ownership, control, and beneficiary. Only in the co-operative enterprise are all three interests
vested directly in the hands of the user. Co-operatives are also enterprises that follow a set of
principles and values.

Co-operatives put people at the heart of all their business. They follow a set of values than
those associated purely with making a profit.
Because co-operatives are owned and democratically-controlled by their members (individuals
or groups and even capital enterprises) the decisions taken by co-operatives balance the need
for profitability with the needs of their members and the wider interests of the community.

How does the Society utilize the funds/deposits collected by it?

The Society uses the funds in lending to the members and investments as per the Co-operatives
society Act/Rules/By-Laws. Society's lending is in the shape of small loans for business or
personal use.

Are the Deposits with the Society safe & secured?

Government of India has framed the laws/rules to ensure the security and safety of deposits
and Credit Co-Operative Society strictly abides by the rules and regulations framed by Central
Government under the Multi- State Co-Operative Societies Act, 2002.

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 PO V Interview Materials

What is the difference between Multi State Credit Co-Operative

Society and Financial Companies?

Multi State Credit society is registered under Multi State Co-Operative societies act and rules.
Society is not a personal institution owned by an individual but is a fully democratic
organization managed by Board Of Directors who are elected by the members of the society in
the Annual General Meetings and the Board Of Directors also take decisions in a collective
manner with total transparency.

The Department of Co-Operatives constantly reviews the functioning of the society at regular
intervals.
Finance companies are usually owned by individuals and frame the so called policies according
to the owners. The general members/ depositors/ Investors have no role to play.
There are some possibilities of the absence of transparency. Members/ Investors have virtually
no knowledge of the affairs/ legal provisions of N.B.F.C. and the statutory liabilities of the
N.B.F.C. are also limited..

What is the difference between Multi State Credit Co-Operative

Society and Banks?

(1) Banks works as per the rules of Reserve Bank of India while Society works as per the Co-Op.
Act.
(2) Audit of Bank is done by the panel of C.A. or R.B.I. officers as per the guideline of Reserve
Bank of India, while in society auditors came from the registrar office of co-op. for audit.
(3) Banks can issue cheque books because they have clearing house license, while society don't
have clearing house license so can't issue cheque books.
(4) When anybody wants to do transaction with society first of all he/she has to become
member of society & have to purchase the shares of it than & than can take loan & put deposit
in society. While in Banks without become member & purchase the shares you can take loan &
also put FD & other deposit.

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