(1) A co-operative society shall advance loans to its members, its employees under a scheme approved by the Registrar or to its depositors on the security of their deposits :
Provided that a co-operative society may make a loan to another co-operative society who is not its member with the prior approval of the Registrar.
(2) At least one-third of the total amount of loan to be advanced by a co-operative credit and service society, farmer‘s service society, primary agriculture and rural development bank or a co-operative urban bank, in a year, shall be sanctioned to the members of the weaker section if they apply for the grant of loan.
(3) Loans and advances shall be made on such terms and conditions against such securities, guarantee and for such purposes as may be prescribed :
Provided that all long term loans shall be advanced against mortgage or charge on land or other immovable property :
* Provided further that in case land or other immovable property is not owned by the loanee, long term loans may be advanced to him, on furnishing two sureties and subject to the further condition that he shall hypothecate or create a charge on, the assets, movable or immovable acquired out of such loan in favour of the society:
**Provided further that all loans advanced under short term, medium term and long term duration for which Reserve Bank of India/National Bank for Agriculture and Rural Development (NABARD) * Section 63 – Substituted by Act No. 19 of 2006.
* Section 64 – Second proviso to sub section (3) added by Act No. 32 of 1986.
** Third proviso and explanation to sub section (3) added by Act No. 19 of 2006.
28 formulated the loan scheme, shall not require the approval of the Registrar.
Explanation:- Long term loa