Section 144-11A : Restrictions on loans and advances
(1)The non-agricultural co-operative credit society shall not,—
(a)grant any loans or advances on the security of its own shares as per section 44 ;
(b)enter into any commitment for granting any loan or advance to or on behalf of,—
(i)any of its present directors and his family members except against his own fixed deposits or those held in the name of the family member in the same society, where he is the director or against adequate and clear security furnished by him;
(ii)any firm or company in which any of the directors and his family member is interested as owner, partner, manager, guarantor or major shareholder or in which he holds any interest.
(2)Where any loan or advance granted and disbursed by a non- agricultural co-operative credit society is such that it could not have been granted and disbursed, if clause (b) of sub-section (1) had been in force on the date on which the loan or advance was granted and disbursed before the commencement of the said Amendment Act, 2017, steps shall be taken to recover the amount due to the non-agricultural co-operative credit society on account of the loan or advance, together with interest, if any, due thereon within the period stipulated at the time of the grant of the loan or advance, or where no such period has been stipulated, before the expiry of two years from the date of the commencement of the said Amendment Act, 2017.
(3)If any question arises whether any transaction is a loan or advance for the purpose of this section, it shall be referred to the Registrar, whose decision shall be final.
Explanation.— For the purposes of this section, the term “family” shall have the same meaning as explained in Explanation I of sub-section (2) of section 75.
