Cooperative societies to be barred from doing banking business
Tuesday, 31 July 2007
Siddique Islam
The cooperative societies will be barred from doing banking operation to protect innocent depositors, official sources said.
The societies will not also be allowed to use the word 'Bank' in their day-to-day operation, they said.
The government is going to amend the existing cooperative act and cooperative guidelines to plug the loopholes, which are being used by the cooperative societies for doing illegal banking business across the country.
Besides, the Ministry of Finance (MoF) has already taken measure through amendment of the related clauses of the Banking Companies Order 2007, which will be placed to the Council of Advisers' meeting for final approval.
The Ministry of Local Government, Rural Development (LGRD) and Cooperative has already formed a five-member committee, headed by Additional Registrar, Department of Cooperative, Saiduzzaman, for preparing a draft on amendment of the related rules and regulations in this regard.
The committee is likely to finalise the draft amendment of the rules and regulations at a meeting scheduled to be held today (Tuesday), which will be submitted to the LGRD and Cooperative Ministry for taking necessary measures.
The members of the committee are Deputy Director of the Bangladesh Bank M Anwarual Islam, Senior Assistant Secretary of the MoF Sohelur Rahman, Senior Assistant Secretary of the LGRD and Cooperative Ministry Ranjit Kumar Dev and Joint Registrar of the Department of Cooperative Abul Hossain.
The government is taking the measures against the backdrop of an alarming growth of such illegal banking business by a section of cooperative societies throughout the country.
Under the proposed amendment, no cooperative society will be allowed to collect deposits or extend loans from and to members of the public or organisations other than its members.
Sources, however, said a section of cooperative societies has long been collecting deposits from the people who are not their members and running commercial banking operations.
"We want to stop such illegal business run by a section of cooperative societies taking advantage of loopholes in the existing rules and regulations," a member of the committee told the FE Monday.
He also said cooperative societies may collect deposit from non-members under the existing rules and regulation.
Earlier, the department of cooperatives formed five taskforces to stop illegal banking business run by some cooperative societies across the country.
The taskforces found at least 18 cooperative societies, which are using the word 'Bank' in the documents on operation.
The cooperative societies will be barred from doing banking operation to protect innocent depositors, official sources said.
The societies will not also be allowed to use the word 'Bank' in their day-to-day operation, they said.
The government is going to amend the existing cooperative act and cooperative guidelines to plug the loopholes, which are being used by the cooperative societies for doing illegal banking business across the country.
Besides, the Ministry of Finance (MoF) has already taken measure through amendment of the related clauses of the Banking Companies Order 2007, which will be placed to the Council of Advisers' meeting for final approval.
The Ministry of Local Government, Rural Development (LGRD) and Cooperative has already formed a five-member committee, headed by Additional Registrar, Department of Cooperative, Saiduzzaman, for preparing a draft on amendment of the related rules and regulations in this regard.
The committee is likely to finalise the draft amendment of the rules and regulations at a meeting scheduled to be held today (Tuesday), which will be submitted to the LGRD and Cooperative Ministry for taking necessary measures.
The members of the committee are Deputy Director of the Bangladesh Bank M Anwarual Islam, Senior Assistant Secretary of the MoF Sohelur Rahman, Senior Assistant Secretary of the LGRD and Cooperative Ministry Ranjit Kumar Dev and Joint Registrar of the Department of Cooperative Abul Hossain.
The government is taking the measures against the backdrop of an alarming growth of such illegal banking business by a section of cooperative societies throughout the country.
Under the proposed amendment, no cooperative society will be allowed to collect deposits or extend loans from and to members of the public or organisations other than its members.
Sources, however, said a section of cooperative societies has long been collecting deposits from the people who are not their members and running commercial banking operations.
"We want to stop such illegal business run by a section of cooperative societies taking advantage of loopholes in the existing rules and regulations," a member of the committee told the FE Monday.
He also said cooperative societies may collect deposit from non-members under the existing rules and regulation.
Earlier, the department of cooperatives formed five taskforces to stop illegal banking business run by some cooperative societies across the country.
The taskforces found at least 18 cooperative societies, which are using the word 'Bank' in the documents on operation.