The State government is coming up with a scheme to safeguard fixed deposits of middle- and lower-middle-class depositors in Maharashtra’s rural credit societies, for up to ₹1 lakh each.
The scheme will provide additional protection to deposits worth ₹40,000 crore in credit cooperative societies in the State. It is on the lines of the Reserve Bank of India’s scheme for urban cooperative banks. State Cooperation Minister Subhash Deshmukh on Wednesday made the announcement after a meeting with representatives of credit cooperative societies.
“The name of the scheme would be Pandit Deendayal Upadhyay Credit Society Deposit Protection Scheme. It will provide protection to deposits up to ₹1 lakh with the credit society,” said Mr. Deshmukh. The scheme will be officially launched by Maharashtra Chief Minister Devendra Fadnavis on September 25.
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Similar protection to the urban cooperative banks is already provided by RBI’s Deposit Insurance and Credit Guarantee Corporations. The State government scheme will be applicable to urban, rural (non-agricultural), women and salaried cooperative credit societies.
“There are 8,421 credit societies in the State with deposits worth ₹40,000 crore, which will now be protected under the scheme. If the society faces financial crisis or goes into moratorium, under the scheme, depositors will get their deposits back, as they would be covered under the new scheme,” said Mr. Deshmukh.
According to officials in the State Cooperation Department, credit societies have sought such a scheme for a long time as they function as micro-finance institutions and serve the lower middle class, small shop owners and labourers, who fall in the lower-income groups. Credit societies can send in applications to participate in the scheme beginning September 26.
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