The scam in Travancore Cooperative Society, which operates in Thiruvananthapuram, is similar to the scams and mismanagement that already took place in cooperative societies in different parts of the state. Ordinary people deposit their surplus savings in such institutions thinking that they will get a little more interest. Institutional managers will be locally influential and well-known. Trust in them will also help attract deposits. The story of frauds in the Travancore Cooperative Society, which is in a crisis of not being able to pay the deposited money, is coming out one after another. The cooperation department found that an deposit fraud of 32 crore rupees was committed there.

The police have registered sixteen cases against eleven office-bearers of the society, including the former president and secretary. The crime branch, which deals with financial frauds, is investigating. The former administration assured the depositors that no one would lose money and that the deposits would be returned within four to five years. However, the depositors are saying that this is just a false promise and demanding that the government should intervene for them to get the money back. A look at the history of cooperative scams that have already taken place in the state, including Karuvannur, shows that depositors have very little to hope for. That is because the governing bodies who leave the cooperatives with a huge amount of money would have strategically invested this amount in other areas.

Delays and irregularities in legal procedures like auditing become a major breeding ground for fraud in cooperative societies. There are people who take loans by pledging properties. However, the value of the properties given as collateral may not be the criteria employed to decide on loan applications. The discretion of the governing body is the criteria for sanctioning loans. Loans sanctioned without sufficient documents are difficult to recover. This is how cooperatives plunge into loss and collapse. Irregularities can be detected early if the auditing is done honestly and there are no lapses in the checks. This is the common characteristic of all cooperative scams.

The administrators of the Travancore Cooperative Society were BJP members. Its president has been in office for two decades. The Cooperative Department has decided to recover the financial loss incurred by the society along with interest from the previous governing bodies. However, everyone knows how difficult and time-consuming the legal proceedings are in this regard. There are examples ranging from Karuvannur to the BSNL society scam in the capital. If the investment can be deposited in safe places then there will be no financial loss. The only issue will be a lower interest rate. Such scams have cast a shadow of doubt even on well-functioning cooperatives. The government should take firm action in this regard.