Irresponsible leaders swallowing cooperative movement

THIRUVANANTHAPURAM: The cooperative movement, once a beacon of welfare and community empowerment, is now under threat as certain cooperative societies fall into the hands of irresponsible leaders. Allegations of unauthorized actions, including granting loans to favoured individuals, have raised concerns about the integrity of the system. Out of approximately Rs 2.5 lakh crore in cooperative deposits, Rs 1.80 lakh crore has been distributed as loans. Irregularities in these loans could destabilize the entire deposit-loan ecosystem. Just as crimes are increasing, so too are financial irregularities. While irregularities were identified in 121 cooperative societies in 2019, this number has expanded to 272 cooperative societies by 2024.

Though these irregularities affect only two per cent of the 16,255 cooperative societies, their impact is widespread, tarnishing the reputation of the sector. In a recent incident, a small trader from Kattappana, Sabu, tragically took his own life after failing to recover his deposits. Reports indicate that intimidating behaviour by a political leader contributed to his distress.

Depositors have accused the government of neglecting critical reports submitted by the Cooperative Registrar and the Enforcement Directorate (ED). These reports highlighted irregularities in membership practices, KYC documentation, record maintenance, and loan collateral processes. Despite repeated warnings and growing instances of malpractice, no significant action has been taken beyond routine investigations. Preventive measures introduced through amendments to cooperative laws have not been effective. It is also alleged that the deposit guarantee system does not cover all institutions.

All that matters is gaining power
The Enforcement Directorate and the Cooperative Registrar had submitted reports to the government highlighting widespread irregularities in granting memberships, recording KYC details, maintaining membership registers, and providing collateral. However, no action was taken in this regard. The primary goal of political parties seems to be capturing power by any means.

16255: Cooperative societies
Rs 2.5 lakh crore: Total deposit