Co-operative societies, PACS are not allowed to raise public deposits, RBI cautions

KOLKATA: Reserve Bank of India has issued an advisory to general public against depositing money in co-operative societies or primary co-operative credit societies ( PACS).

"Such co-operative societies have neither been issued any licence under Banking Regulation Act, 1949 (As Applicable to Cooperative Societies) nor are they authorized for doing banking business," RBI said.

These entities are allowed to raise deposits only from their members.

The insurance cover from Deposit Insurance and Credit Guarantee Corporation will not be available for deposits placed with these entities. "Members of public are advised to exercise caution and carry out due diligence of such entities before dealing with them," RBI said.

It has come to the notice of the sector regulator that some co-operative societies and PACS are accepting deposits from non-members, violating banking rules.