The Central Registrar of Cooperative Societies has taken strong regulatory action against Nirmal Ujjwal Credit Cooperative Society Limited, prohibiting it from accepting new deposits or renewing existing ones. The decision was made citing serious financial impropriety, diversion of funds, conflict of interest, and regulatory non-compliance uncovered during an ongoing police investigation.
Restrictions Imposed
The society has been directed to inform all members and depositors about these restrictions and to prominently display the order on its website and at all offices and branches. The authority concluded that allowing the society to continue accepting funds would expose the interests of members and depositors to significant financial risk and could worsen the situation.
Details of the Order
The order, issued on April 24 following a hearing, directs the Nagpur-based society to immediately halt all deposit mobilization activities until further notice. The online hearing was attended by society vice-president Vitthalrao Gawande and chief executive officer Nanda Bante. The decision follows findings by a Special Investigation Team (SIT) that pointed to prima facie involvement of certain office-bearers in alleged misappropriation of funds.
Specific Irregularities
According to the order, loans were sanctioned in the names of staff and subsequently transferred to an entity identified as PNG Corporation. Additionally, loans were extended to individuals linked to the same entity, with funds routed back to it. Large portions of loans disbursed between 2020 and 2025 remain unpaid, while a loan of significant magnitude was granted to the then secretary with inadequate recovery action.
Regulatory Non-Compliance
The registrar also flagged the society's failure to submit complete annual returns as mandated under Section 120 of the Multi-State Co-operative Societies Act, 2002. Despite denying allegations in its written response dated April 14, the society furnished no cogent or verifiable documentary evidence to support its claims. During the hearing, representatives admitted that PNG Corporation and Nirmal Food Product were made members and granted loans, a move found to be in violation of statutory provisions.
Governance Concerns
The order noted that recovery proceedings appeared to have begun only after issuance of notice and initiation of the SIT probe, raising further concerns about governance lapses. The matter is still under active investigation, the registrar observed, adding that the Nagpur bench of the Bombay High Court, in its March 24 order, took note of the prima facie involvement of certain office-bearers.
