A report in ET by Sugata Ghosh shows how income-tax sleuths have unearthed a case of large-scale money laundering through a multi-state urban cooperative credit society’s account. Multi-state cooperative credit societies, which accept deposits only from, and give loans to, members, are regulated by the central registrar under the agriculture ministry. It makes sense for the RBI to be a joint regulator, as with cooperative banks, or to convert all credit societies into cooperative banks. Cooperative credit structures, the world over, combine thrift and credit, based on mutuality. If these credit societies cannot be properly regulated, they can be culled, without much reduction in social welfare.

Source: Economic Times May 23, 2017 18:23 UTC