Investing in credit cooperative societies turns risky in Mancherial
Three cooperative societies have shut shop in the district from 2020 to 2023, leaving thousands of customers in the lurch. In the latest instance, Ujwala Credit Cooperative Society Limited was shut down after raising Rs.3.5 crore in the form of fixed and recurring deposits from 3,000 members.
Mancherial: Depositing hard earned savings with private mutually aided cooperative societies is becoming a risky affair for small scale vendors, farmers and retired coal miners. Forget the returns, many are ending up losing their deposits following abrupt closure of several credit cooperative societies in Mancherial district.
Three cooperative societies have shut shop in the district from 2020 to 2023, leaving thousands of customers in the lurch. In the latest instance, Ujwala Credit Cooperative Society Limited was shut down after raising Rs.3.5 crore in the form of fixed and recurring deposits from 3,000 members. Cases were booked against the organisers for cheating customers. Floated in 2020, it had branches in Mancherial, Bellampalli, Luxettipet, Sircilla and Vemulawada.
Also Read
The credit cooperative societies are luring customers by promising higher rates of interest than those offered by scheduled banks and are able to draw huge deposits. However, they are diverting the funds after a period of time and reportedly investing the funds in real estate and other sectors.
Earlier, Adarsha Credit Cooperative Society Limited (ACCSL), established in 2017, launched its branch in Hi-Tech City Colony of Mancherial town. It could attract 20 lakh customers with14 percent rate of interest on fixed deposits. It opened 800 branches soon after two years following inception. It had 30,000 members. However, it stopped operations since January 2020, shattering hopes of those who invested Rs.20 crore in Mancherial district.
The assets of the society worth Rs.1,500 crore were attached by the Enforcement Directorate (ED). The property is located in Rajasthan, Haryana, New Delhi, Gujarat, Maharashtra and Uttar Pradesh. Branches of the entity have already been closed. Gullible customers are still forced to run from pillar to post, seeking justice.
Vadlakonda Madhunamma, an 81-year-old farmer from Manthani told ‘Telangana Today’ that she invested her savings of Rs.1.50 lakh in ACCSL expecting she would get huge returns in 2019. She stated that the society neither paid back the investment, nor interest till date. “I have been frequenting the police station to get back my money,” she added.
Meanwhile, Mudra Agricultrue and Skill Development Multi-State Cooperative Society gathered around Rs 200 crore from thousands of customers of Telangana and Andhra Pradesh by offering a 12 percent interest from 2017 to 2019. However, it closed operations in 2020 due to a financial crisis. Subsequently, cases were registered against the founders. Victims are left with no option but to approach courts.
Ramagundam Commissioner of Police Rema Rajeshwari said cheating by a financial institution was being taken seriously. Cases were being booked against the organisers of the societies who cheat the customers. She advised the public to cross check the background and financial performance of an institution before investing.
