Cooperatives engaging in gold mortgage

The authorities have started probe into allegations that some multi-purpose cooperative societies (MCS) are allegedly engaging in 'unlawful' credit operations through gold mortgage, officials said.

The Department of Co-operatives (DoC) authorities started the investigations following hundreds of complaints against dozens of MCSs, lodged by aggrieved clients with different police stations and cooperative offices across the country.

According to the existing laws, there is no provision of the co-operatives extending credit after taking gold as mortgage, but the MCSs were doing such business for long in total disregard for the laws, the DoC official said.

He said these cooperatives received the precious metal worth billions of taka, enticing mostly housewives and small traders and failed to return those to their borrowers after repayment of the entire amount of loans as most of the deposited gold were either sold out or invested elsewhere on higher interest.

"The DoC did not give permission to any of these co-operatives for doing such business. Telling lies, they convinced their clients that such deposits were permitted by us," DoC additional registrar Amiya Kumar Chattopadhaya told the FE Thursday.

Mr Chattopadhaya said the department has stopped operation of a number of such MCSs and departmental inquiries are going on to find out their irregularities and liabilities to their clients.

"After probing the irregularities, DoC will file cases against these MCSs or refer the issue to the Anticorruption Commission (ACC)," he added.

The additional registrar, however, could not answer as to how the cooperatives could do the 'illegal' business for long despite audits of the MCSs by its officers every year.

However, following the move of DoC, many MCS office-bearers went into hiding, leaving hundreds of their clients in uncertainty.

Some aggrieved customers claimed, if the MCS return the ornaments, they often change quality and weight of the ornaments.

"I took Tk 3,00,000 as loan from Narayanganj credit cooperative society mortgaging 15 bhoris of gold. I cleared the entire amount of loan along with interest accordingly in January last, but I am yet to get back by valuables from the MCS," Sajeda Akter, an aggrieved customer told the FE Thursday.

Abul Kalam, another client of Peoples Multipurpose Co-operative Society said he took loans amounting to Tk 2,00,000 and repaid the sum within a year but the cooperative authority were dilly-dallying in returning gold ornaments.

"I mortgaged my sister's gold ornaments to the cooperative as I was badly in need of money then. After I repaid the amount, the cooperative official dilly-dallied with me for seven months and now they have gone into hiding," he added. "I'm now at a loss as to what to say to my sister and her husband," he added expressing his helplessness.  

Senior officials at the Department of Cooperative (DoC) feared that this might turn out to be another Destiny or Jubok like situation.

Meanwhile, this scribe while visiting many cooperatives found that hundreds of people were bargaining with the officials of the cooperatives to take back their ornaments.

Aggrieved clients alleged the cooperatives did the 'unlawful' business in connivance with police and DoC officials.

An alarming situation was found at Narayanganj credit cooperative society at Banglabazar area at the city's old part. According to district co-operative officer of Narayanganj Nur-e-Alam, there is no trace of the major portion of gold received by Narayanganj credit cooperative society.

"The co-operative mortgaged very small portion of the gold with the BSBL. The rest of the ornaments were either sold out by them or mortgaged elsewhere for higher amount of loans," he added.