Procedure to Inspect a Cooperative Society in Kerala

Section 66 of the Kerala Societies Act and Rule 66 of the Rules deal with inspection and supervision of societies function in Kerala. The inspection notes are to be prepared in the forms prescribed by the registrar for different types of societies. But the preparation of the notes in the form alone will not bring out the exact achievements or business results.

Therefore, while inspecting the account of the society, inspecting officers should review and working results during the period covered by the inspection, with particular reference to the following aspects:

1. Membership: Review the position of the membership with the population in the area of operation of the society and see whether all the families are represented.
2. Removal of overlapping, if any (See whether the area of operation of the society overlaps with that of any other similar type of society in the locality): If so point out the names of such societies and give suggestion for solving problems.
3. Deposits: Examine the rates of interest given by the Commercial Bank working in the area, on deposits and make observation whether the management has gained confidence of depositors, after examining the flow of withdrawals and deposit made during the period under the review.
4. Sanction of credit limits: State whether the credit limit statements received has been forwarded to the financing bank in time, See whether there has been any undue/ avoidable delay in forwarding the same.
5. Issue of loan: See whether the loan are issued in time. whether the loan issued are adequate and whether the loans are issued for the purpose envisaged in the bye-laws. As regards the repayment of loans, see whether the repayments are made regularly. The time-lag between the closure of one loan and issue of another loan to the same member may also be watched.
6. Non-credit activities: See whether the activities undertaken by the society are economically viable and whether standardization is brought about. It should be observed whether the society, if dealing in fertilizers has available of cash credit accommodation from the financing bank.
7. In the case of Processing Societies: In the main aspect to be dealt by the inspecting officer is the conversion of the raw materials collected by the society. The conversion results should be scrutinized and critically reviewed to see whether the management is taking do initiative to get the desired results.