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Registration of credit co-operate society under Multi-State Co-operative Societies Act, 2002.

Credit Co-operative society/ Patpedhi is formed when independent group of people belonging to the same class, come together voluntarily to tend to their common economic, social and cultural agendas and requirements through an enterprise which is jointly-owned and controlled democratically by such people.

It accepts deposits from members and provides loans to its members at reasonable interest rates. The objective here is to develop the habit of saving among members and to be able to give members loans when they require at interest rates considerably lower than those of the banks and financial institutions. The formalities for credit cooperative society registration are simpler and the process is less complex.

A registered cooperative society can hold property, enter into contracts, institute and defend suit and other legal proceedings and to do all things necessary for the purposes of its constitution. A registered society can give loans only to its members. However, it can give loan to another registered society with permission of Registrar.

A society with unlimited liability cannot lend money on security of movable property without sanction of registrar. State Government, by issuing a general or special order, can prohibit or restrict lending of money on mortgage of immovable property by any registered society or class of registered society. It must be noted that no MSCS shall make a contribution, either in money of in kind, directly or indirectly, to an institution, which has an object of furtherance of the interest of a political party.

Before learning more on the subject matter, we must try to understand what is the difference between co-operative bank and credit co-operative society. They are two different entities. Eg. Adarsh Co-operative bank and Adarsh Credit Co-operative society.

A co-operative bank means a co-operative society, which undertakes banking business. A credit co-operative society can become a co-operative bank upon obtaining a license from the RBI under section 22 of the Banking Regulations Act, 1949. Whereas, a credit co-operative society doesn’t deal in banking business, instead it lends money only to its members.

It involves the co-operative societies act, 1912/ multi-state co-operative societies act, 2002, banking regulation act 1949 and the banking (co-operative societies) act, 1965. (Eg. Cosmos bank, PCMB Bank etc.).

A multi state credit co-operative society is registered under multi- state cooperative societies act, 2002, which precedes cooperative societies act, 1912. It purely works for the mutual benefit of its members. The MSCS Act, 2002 is similar to Companies Act with respect to documentary compliance.


1. Their object should be to serve the interest of members in more than one state.[1]

2. The by-laws of the society should provide for betterment of its members through self -help and mutual aid, in accordance with the co-operative principles.[2]

3. Word “limited” or its equivalent shall be suffixed to its name in case it is a limited liability society.[3]

4. Need at least 50 members from each state.[4]

5. Persons who may become members:[5]

  • An individual competent to contract under section 11, Indian Contracts Act, 1872.
  • Any multi-state Co-operative society or any co-operative society.
  • The central government
  • The state government
  • National Co-operative Development Corporation
  • Any other corporation, armed or controlled by the Government

6. It needs to be registered and obtain registration certificate from central registrar.[6]

Registration process:

  • Registration application to be made to the central registrar.[7]
  • Application needs to be submitted along with necessary documents and consent of minimum members from each state i.e. 50 or duly authorised representative of at least five Co-operative societies, if members are cooperative society or by duly authorised representatives of each of such societies, if another multi-state cooperative society and other cooperative societies are members.[8]
  • The Central Registrar shall dispose off the application for registration within a period of four months from the date of receipt thereof by him.[9] However, upon the failure of Central registrar to dispose off the application within the prescribed period, it shall be considered to have been accepted.[10]

List of documents required for registration:

Sr. No. Particulars
1. Form 1 under the MSCS Act, 2002 along with documents required under form 1. (Certificate in respect of clause (b), (c) and (d) of sub section (1) of section 7)[11]
2. A certificate from the bank stating credit balance there in favor of the society to be registered[12] and a list of persons who have contributed to the share capital, the amount paid by each of them along with admission fees paid by them.[13]
3. A scheme explaining how the proposed society has reasonable prospects of becoming a viable unit.[14]
4. Four copies of the Bye-Laws.[15]
5. Proposed area for registration shall initially be permitted for two contiguous states only.
6. List of at least 50 members from each state. To be submitted in the format given under the impugned act along with their ID proofs duly attested by Chief Promoter.
7. Certified copies of the resolutions passed by them along with certified copy of the promoter, which shall specify the name, and address of one of the applicants to whom the central registrar may address correspondence under the rules before registration and dispatch or hand over registration documents.[16]
8. Contact number of the E-mail address of the chief promoter or society on cover page of the application.
9. No Objection Certificate from the Registrar of Co-operative societies of the state/ U.T., where the area of operation of society is proposed to be confined.[17]
10. A certificate to the effect that the credentials of the Chief Promoter/Promoter have been verified by the Registrar of the Co-operative Societies of the states where the head office is proposed to be located.


[1] Section 5(1)(a) of MSCS Act, 2002.

[2] Section 5(1)(b) of MSCS Act, 2002.

[3] Section 5(2) of MSCS Act, 2002.

[4] Section 3

[5] Section 25 of MSCS Rule, 2002.

[6] Section 7 of MSCS Act, 2002.

[7] Section 6(1) of MSCS Act, 2002.

[8] Section 6(2) of MSCS Act, 2002.

[9] Section 7(2) of MSCS Act, 2002./ Section 3 of MSCS Rules, 2002.

[10] Section 7(3) of MSCS Act, 2002./ Section 3 (1)(a) of the MSCS Rules, 2002.


[12] Section 3(1)(c) of MSCS Rules, 2002.

[13] Section 3(1)(b) of MSCS Rules, 2002.

[14] Section 3(1)(d) of MSCS Rules, 2002.

[15] Section 6(3) of the MSCS Rules, 2002.

[16] Section 3 (1)(e) of MSCS Rules, 2002.


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  1. Karam jeet singh says:

    Shrimaan main Sahara ke Hamara India credit cooperative society limited mein invest Kiya tha jiska hai maturity 29/05/2020 ko thi payment nahi de rahe mujhe payment dilane ki kripa kare.
    ATI kripa hogi invester karam Jeet Singh

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June 2024