The Nagaland Co-operative societies (3rd Amendment) Act,2011

The Nagaland Co-operative societies 
(Amendment) Act, 2011 (Act No. 5 of 2011) 
Received the assent Government of Nagaland on 07/04/20 11 and published in 
theNagaland Gazette extraor- dated 3 1/05/2011. 
To Amend the Assam Cooperative Societies Act, 1949, as applicable to the 
State ofNagaland, it is hereby enacted in the Sixty Second Year of the Republic of 
India as follows: 
Short title extend commencement: 
(i) This may be called the Nagaland Cooperative Societies (Amendment) BiU- 
2011. 
(in) It shall extend to the whole State of Nagaland. 
i It shall come into force on such date as the State Government may, by 
notifcation in the Official Gazette, appoint. 
The following clauses shall be inserted in the Assam Cooperative Societies Act, 
1949, inthe applicable to the State ofNagaland. 
Notwithstanding anyhng contained in the Assam Cooperative Societies Act, 1949, in 
the case of Revival and Restructuring of the Short Term Cooperative Societies Credit 
Structure (STCCS) in the state, comprising the State ~erm dooperative ~ank (SCB) 
and Primary Agricultural Credit Societies (PACS) including LAMPS, MPCS and FSS 
affiliated to theAgriculture State Co-operative Bank Ltd., on a sustainable basis as 
under. 
To be inserted in 1. In the Principal Act, After Section 1 1, the 
following 
Section 11 Section shall be inserted, namely:- 
As Section"1 I .A" "1 1. A:- No primary Agriculture Credit 
Cooperative SocietyIMPCS shall used the word 
"Bank', "Banking", Banker or any other derivative 
of the word "Bank" in its name and the existing 
society using such name shall be deregistered by 
the Registrar. 
To be inserted in 
Section 13 
As Sub- Section (4) 
2. In the principalAct in Section 13,after Sub- Section 
(3) the following Sub-section shall be inserted, 
namely:- 
(4):- Provided that the application forthe registration 
of the Amendment of bye-Laws of a Short Term 
Cooperative Credit Structure Society shall be 
disposed off so far as pmcticable within30 days fiom 
the date of the receipt ofthe application. 
To be inserted in 3. In thePrincipalAct 14, after Section 14, the 
Section 14 following section shall be inserted as 14-A:- 
As Sub-section "14-A" " 14-A (i):- A short Term Cooperative Credit 
Structure Society shall be at liberty to affiliate or 
disaffiliate with any federal Societv of its choice. 
provided s resolution approving such affiliation or 
disaftiliation with the federal societv aassed in the . A 
annual general meeting with three fourth majority 
of total members, subject to the approval of the 
R.C.Sn 
(ii):- A Short Term Cooperative Credit Structure 
Society shall have the freedom of entry and exist 
To be inserted in 
Section 17 (1) 
Sub- Clause (a) 
at any tier of CCS and there shall be no mandatory 
restrictions of geographical boundaries for its 
operations. 
4. Inthe PrincipalAct in Section 17 (1) shall be 
inserted as Sub-clause (a). namely:- 
\ ,. 
"17 (1) (a): To provide full voting membership right 
to all de~ositors/borrowers in Coo~eratives other 
L 
than Cooperative Banks, provide that he or she is a 
share holder of the Registered Cooperative 
Society". 
To be inserted in "34-A (1):- The Committee of every 
Section 32 (I) (a-i) society in a Cooperative Credit Structure shall have 
freedom to decide its financial and internal 
administrative matters, especially in the following 
areas". 
(i) Interest rates ondepositsand loans inconformity with 
RBI guidelines, 
(ii) Borrowings and investments, 
(ii) Loans policies and individuals loans decisions, 
(iv) Personal policy, staffing, recruitment, posting and 
compensation for the audit. 
(2) No person shall be elected, nominated or co- 
opted or allowed to continue as a member of the 
Board of Short Term Cooperative Credit Society, 
if he, :- 
(i) Is a person who represents a society other than 
PACSMPCS on the Board of the SCB, if such 
societyto whom herepresents has committed a default 
towards the payments to such Bank for a period 
exceeding 90 (Ninety) days. 
(ii) Is a person who committed a default towards the 
payments to a PACSMPCS or represents a society 
on the Board of the SCB, if such society to whom he 
represents has committed a default towards the 
payments suchbank for a period exceeding one year 
unless the default is cleared. 
To be inserted in 7. Inthe principal Act, in Section 36, after Sub- 
Section 36 as 
Section36-A (I) (2) 
(3) (4) 
Section 5, the following section shall be inserted, 
namely- 
36 (A) (1): The Supercession of the Board of the 
SCB 
SCB by theRCS under any other Sectionofthe State 
Cooperative Society Bill, shall be done only in 
consultation ofthe RBI. 
(2) The Supercession of the Board of the PACS/ 
MPCS shall be done by the RCS only under the 
following conditions; 
6) Ifa society incurs losses for three consecutive years, 
or 
6) If serious financial irregularities or huds have been 
identified, or 
(iii Ifthere are judicial directives to this effects or there 
is perpetual lack of quorum. 
(3) The RCS shall conduct elections to a Short Term 
Cooperative Credit Structure Society within two 
month from the date of supercession. 
(4) The member ofthe Board which has been removed 
under Sub- Section 2 (i), (ii) and 2 (iii) shall not be 
eligible to contest the election again for a period of 
three years from the date of supercession. 
To be inserted in 8. In the principal Act, after Section39,the following 
Section 39 as section shall be inserted, namely:- 
Section "39.A" " 39 (A) :- The Directors and Chief Excecutive 
Officers of the SCB who do not fulfil the criteria 
stipulated by the RBI shall be removed by the 
Registrar or the AppointingAuthority, as the case 
may be at the recommendation of the NABARD or 
RBI. 
To be inserted in 9. In the principal Act, after Section42, the following 
Section 42 as section shall be inserted, namely:- 
Section 42-A Provided that in the case of Societies in the 
Cooperatives Credit Structure, shall have the 
fieedom to obtain loans fiom any Bank or financial 
institutions regulated by RBI and refinance from 
NABARD or any other refinancing agency directly 
or through any RBIregulated fmancial institutions 
To be re-numbered 
And added in 
Section 43 as 
andnot necessary from the federal society to which 
is afliliated ". 
1 0. In the Principal Act, in section 43, the existing 
section shall be renumbered as Sub-section (1) of 
the 
section and after Sub-section (1) as so renumbered, 
clause(2) the following Sub-section shall be added, 
namely:- "(2) 25% State equity shall be applicable 
to the State Cooperative Bank (SCB) in the normal 
course, the State Government may be further 
allowed to contribute equity above the limit only in 
case of equity infusion as required in the SCB in 
accordane with Section 11 (1) of the BRAct 1949 
(AACS) provide that there shall be only one 
Government representative on the Board of SCB 
duly nominated by the authority concerned. The 
CEO of the SCB shall not be treated as the 
representative on the Board. However, in case of 
the Board of PACS/MPCS/LAMPS/FSS, there 
shall be no Government nominee. The State or a 
Cooperative may reduce or enhance the State equity 
at any level if so advice." 
To be added in 11. In the Pricipal Act, in Section 5 1, after Sub Section 
Section 5 1 as (2), the following Sub- Section shall be added, 
namely:- 
Sub-section 51 (3) (4) " (3)- A Short Term Cooperative Credit Structure 
Society shall have the freedom to invest or deposit 
its funds in the Bank or financial institution 
regualated by the Reserve Bank of India and not 
necessarily in the federal society to which it is 
affiliated." 
To be inserted in 
Section 53 as 
Section 52-A 
12. In the principal Act, after Section 52, the following 
to be inserted, namely:- 
"52-A. Provide that in the case of societies in the 
Cooperative Credit Structure, the Government or 
Registrar shall have no powers to direct the society 
to contribute to any other fund other than those 
required for improving the net worth/owned fkds ". 
To be inserted in 13. In the principal Acr, in Section 54, after Sub- Section 
Section 54 as (3), the following Sub-section shall be added, 
namely:- 
Sub- Section (4) (5) "(4)- A Short Term Cooperative Credit Structure 
Society of PACSIMPCS shall pay devident in 
accordance with the guidelines hed by the RCS in 
consultation with theNABARD." 
To be inserted in 14. In the Principal Act, in section 55, after Sub- Section 
Section 55 as Sub-section shall be inserted, namely:- 
Su-Section (4) (5) "The Registrar shall ensure conduct of audit and 
certification of the account of the SCB by Chartered 
Accountants. The panel of auditors shall be prepared 
by the Registrar in prior consultant with the 
NABARD. 
(5)- The Registrar shall ensure conduct of special audit 
of SCB if requested by the RBI in the manner and 
fonn sptipulated by the RBI and also fbkh thereport 
to RBI within the time stipulated." 

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