The decision by the State Registrar of Cooperative Societies to revoke the No Objection Certificate (NOC) granted to Tirumalla Tirupati Multistate Co-operative Credit Society Ltd. marks a crucial step in highlighting discrepancies in financial institutions operating within the State, particularly cooperative societies, given their dubious track record. This is a significant initiative in safeguarding public interest in financial dealings.
The Office of the Registrar of Co-operative Societies, Goa, has cited serious lapses and non-compliance with statutory norms, raising concerns about regulatory oversight, transparency, and consumer protection. It maintained that enough opportunities were given to the management to come clean on compliance and submit audited financial statements. The Registrar maintained that the credit society did not cooperate with the statutory inspection and verification processes over the past years, and also failed to respond to notices seeking appearance before the Registrar’s office.
It may be recalled that the society with a multi-state cooperative society status was granted permission through letters dated July 31, 2014, and June 28, 2018, and was authorised to expand its operations and establish 13 branches across Goa. Multi-state societies come under the purview of the Central Registrar of Co-operative Societies, with the State Registrar delegated the authority to oversee accounts and conduct verifications and statutory inspections.
It is obvious, through the communication of the State Registrar, that the society failed to meet the required compliance, leading to suspicion about the credibility and its functioning. Goa has had a nightmarish experience with cooperative societies and allied banks. Financial irregularities have played havoc, sending families and common investors into huge losses and financial distress. Chief Minister Pramod Sawant, while stating that some credit societies have "turned into a system of loot," had assured stringent curbs and tighter digital oversight.
Leading the pack with financial impropriety were major banks like State Cooperative Bank, Madgaum Urban Cooperative Bank and Mapusa Urban Cooperative Bank. The Visionary Urban Cooperative Society, which was dominant in Salcete, saw a scam running over Rs 39 crore. The Ashtagandha Urban Cooperative Credit Society (Pirna) reported a financial fraud of Rs 11.28 crore. There were others like the Sada Urban Co-op Credit Society fraud, the UCO Bank fake gold loan scam, etc.
Audit lapses or not allowing scrutiny of books and financial records raise doubts, and in this regard, the State Registrar’s action is commendable. People get attracted to credit societies because they offer high returns. Gullible Goans have shown tendencies to take risks for higher interest rates. As a regulator, such action is needed from the Registrar to alert the investor to exercise caution.
This development highlights the importance of exercising due diligence when engaging with financial institutions. Depositors must verify the regulatory status of the entities they trust with their money. The revocation of the NOC for Tirumalla Tirupati Co-operative Society is a reminder that regulatory vigilance is a must to check the integrity of financial systems from time to time. There must be timely interventions, so that fraudsters don’t get the liberty to pack their bags and disappear with the “loot”. It remains to be seen how the State Registrar takes this forward and communicates the urgency of action to the Central Registrar. The primary focus should be to insulate common citizens from financial losses.
