Till November 14, when RBI and the government made it clear that cooperative banks could not accept deposits, members of hundreds of housing societies paid dues in cash, and maintenance of almost a year or two in advance to avail of discounts.MUMBAI: Soon after the demonetisation announcement, Ameya housing society in Borivli witnessed an overwhelming response to a scheme to get a 2% discount on payment of maintenance bills in advance. Many residential and commercial defaulters, who had dues of the last few months pending, cleared arrears in one go. The scene at Ajantha housing society in Malad and some others in Ghatkopar and Bandra was no different.
Till November 14, when Reserve Bank of India and the government made it clear that cooperative banks could not accept deposits, members of hundreds of housing societies paid dues in cash, and maintenance of almost a year or two in advance to avail of discounts. The announcement came after RBI doubted that many would park black money in cooperative banks, credit and housing societies to avoid income-tax action.
“Many housing societies may see an increase in balance-sheets. At many societies, members who had deliberately not paid dues for years in protest against policies of committee members, suddenly made payments. Soon after the government’s announcement to not accept deposits in cooperative banks, we advised many societies to avoid cash transactions. But before that, many reportedly paid dues and advances in cash,” said Surendra More, chairman, Mumbai Suburban District Housing Federation, which has hundreds of housing societies as members.
At some societies, like Kanyakumari in Andheri, residential members offered to pay maintenance for a year in advance but it was turned down, citing objections from banks. A member of Avighna society in Bandra said many societies, including theirs, accepted cheques and told members to deposit cash in banks directly against their individual accounts to avoid audit queries.
Ramesh Prabhu, chairman, Maharashtra Societies Welfare Association, which has hundreds of cooperative bodies as members, said soon after the announcement, many societies came up with schemes of advance payment of maintenance and later deposited cash and cheques in banks. “When RBI instructed cooperative banks not to accept deposits, as almost all coop societies have accounts with cooperative banks, we directed them to avoid cash payments and accept only cheques to avoid audit objections,” said Prabhu, pointing out that even the number of societies that completed audits has gone up remarkably due to growing awareness. But he lamented the fact that even today, 50% housing societies still do not hold elections, which are mandatory, and can be held only if the society has audited its accounts and submitted audited balance-sheets to the cooperative department.
A senior cooperative department official said RBI and the government did not give enough powers to cooperative banks and credit societies to accept deposits, affecting their turnovers and economy. “In many areas, cooperative banks work as agents for nationalized banks for collection and disbursement. Initially, we received cash deposits. We could have got a lot of business had RBI and the government empowered us to go ahead with deposits and exchanges. The department had also requested that coop banks accept deposits and later allow income-tax and other investigating agencies to probe individual account-holders’ transactions. But it did not happen,” he added, pointing out that many coop banks had lost business.
Prof Deepak Dagali of Kanyakumari housing society said some members offered to pay cash in advance but after RBI’s directive, cooperative banks refused to accept deposits. In societies in Bandra, Navi Mumbai and Thane, many cash payments were made to pay dues besides advances, but after RBI’s diktat, they forced residential and commercial members to pay only by cheque.
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