On April 5th, 2023, the Ministry of Cooperation made a statement in the Rajya Sabha regarding the transfer of funds to help depositors of Sahara cooperatives. The statement was made by the Minister of Cooperation, Shri Amit Shah, in response to a question.
Background on Sahara Cooperatives
Four multi-State cooperatives societies, Sahara Credit Cooperative Society Ltd, Saharayn Universal Multipurpose Society Ltd, Humara India Credit Cooperative Society Ltd, and Stars Multipurpose Cooperative Society Ltd, were registered between March 2010 and January 2014 under the provisions of the Multi-State Cooperative Societies Act, 2002.
However, a large number of complaints were received regarding non-repayment of deposits to the members and depositors of these societies. After issuing notices and holding hearings, the Central Registrar of Cooperative Societies (CRCS) found that these societies had cumulatively collected a total of Rs. 86,673 crore as deposits from around 10 crores depositors. The CRCS directed the societies to pay the due amounts to the depositors and prohibited them from taking fresh deposits and renewing existing deposits.
The orders were challenged in court by three of the societies, but the Delhi High Court partially vacated the stay and restored the orders of the CRCS. The Supreme Court later requested both the High Courts to dispose of the cases pending before them within six months.
Transfer of Funds to Help Depositors
In the Interlocutory Application No. 56308/2023, filed by the Ministry of Cooperation, the Supreme Court ordered that Rs. 5,000 crore out of the Rs. 24,075 crore deposited in the “Sahara-SEBI Refund Account” be transferred to the CRCS. The CRCS will then disburse the funds to the legitimate depositors of the Sahara Group of Cooperative Societies.
The disbursement will be supervised and monitored by Justice R. Subhash Reddy, with assistance from Shri Gaurav Agarwal, Amicus Curiae. The manner and modalities for making the payment will be worked out by the Central Registrar of Cooperative Societies in consultation with Justice R. Subhash Reddy and Shri Gaurav Agarwal.
The funds will be paid to the genuine depositors of the Sahara Group of Cooperative Societies out of the Rs. 5,000 crore, at the earliest but not later than nine months from the date of the Supreme Court’s order dated March 29, 2023. The balance amount will then be transferred back to the “Sahara-SEBI Refund Account.”
In conclusion, the Ministry of Cooperation is taking steps to help depositors of Sahara cooperatives by transferring funds to the Central Registrar of Cooperative Societies. The disbursement of these funds will be transparent and based on proper identification and proof of deposits and claims.
Importance of Cooperative Societies
Cooperative societies play an important role in the financial sector of the country by providing access to credit and other financial services to their members, who are often from marginalized and low-income communities. By pooling resources and providing mutual support, cooperative societies can help their members achieve financial stability and improve their quality of life.
However, as seen in the case of the Sahara cooperatives, there are times when things can go wrong and depositors may not receive their rightful returns. In such cases, it is important for the government to step in and take necessary measures to protect the interests of depositors and ensure that they receive their due payments.
Steps to Protect Depositors’ Interests
The Ministry of Cooperation’s decision to transfer funds to the Central Registrar of Cooperative Societies is a step in the right direction to protect the interests of depositors of Sahara cooperatives. By entrusting the disbursement of funds to a neutral and impartial authority, the government is ensuring that the funds will be disbursed in a transparent and fair manner.
Moreover, the Supreme Court’s appointment of Justice R. Subhash Reddy and Shri Gaurav Agarwal to supervise and monitor the disbursement of funds will provide an additional layer of oversight and accountability. This will help to build confidence among depositors and ensure that the disbursement of funds is carried out in a smooth and efficient manner.
In conclusion, the Ministry of Cooperation’s decision to transfer funds to help depositors of Sahara cooperatives is a positive step that will help to restore the confidence of depositors in the financial sector. By ensuring that the disbursement of funds is carried out in a transparent and fair manner, the government is taking an important step towards protecting the interests of depositors and promoting financial stability in the country.
How to go by it? what are the procedure and documents needs to apply for the claim?
When will the process start? And what will be the procedure?