PANAJI: Despite being in existence for about two and half decades, urban co-operative credit societies in Goa are only now waking up to the responsibility of screening their depositors’ background or having their PAN.
Several co-operative credit societies, it is discovered, do not follow the know-your-customer (KYC) rule or are firm on PAN while accepting the deposits from the public.
Unofficially senior managers from numerous co-operative credit societies said that the process of being a member is often completed alongside with accepting term deposits although it is obligatory for an individual to be a shareholder of the society first before having a fixed deposit.
In a recent case, wherein VPK Urban Co-operative Credit Society is in adverse limelight for accepting deposits worth Rs 2.4 crore, Ashok Gaude, managing director, said that since most of the depositors are from rural areas, they do not have PAN.
“We do not insist on PAN for deposits even if they are of high value,” Gaude said.
The society is currently urging its depositors to produce their PAN cards and trying to rectify the situation. We are educating the depositors about the necessity of PAN, he said.
Gaude, however, claimed that deposits are accepted only from a person who is introduced by a member and that TDS deduction is being made whenever applicable.
VPK Urban had fixed deposits worth Rs 2.4 crore from the wife and daughter of Chetan Desai, president of GCA, who is facing investigation for siphoning off funds.
Gaude said that he would have to “check” whether the wife and daughter of Desai were shareholders of the society.
It is learnt that in the race to build up deposits, several co-operative credit societies are giving the go by to information on depositors through KYC.
Unlike co-operative banks that are subject to RBI guidelines and follow banking norms, the local urban credit co-operative societies face less regulation as they are under the state Registrar of Co-operative Societies.
There are about 150 co-operative credit societies in Goa and most of them are behind in audit, it was divulged by a government official.
He said that co-operative credit societies do not finalise their accounts in time and have the problem of mounting non-performing assets.
Depositors in co-operative credit societies are under the scanner of the Income Tax department for not paying tax on the interest earned on deposits.
The Income Tax department is scrutinizing the TDS records of societies under the ongoing Income Declaration Scheme 2016.