Short Answer

Yes, there are legal provisions under the Gujarat Cooperative Societies Act, 1961 to ensure society funds are not kept idle, and there is a limit on cash reserves that can be maintained.

Detailed Explanation

Section 73 of the Gujarat Cooperative Societies Act, 1961 addresses the investment of funds of cooperative societies. It states that a cooperative society can invest its funds in specified securities or place them in a cooperative bank or a scheduled bank. This provision ensures that the society's funds are utilized effectively and not kept idle. By investing in approved avenues, the society can earn returns on its funds, benefiting its members.

Furthermore, Rule 90 of the Gujarat Cooperative Societies Rules, 1965 specifies the limits on cash reserves that a cooperative society can maintain. It states that the cash reserves of a society should not exceed a certain percentage of its working capital. This restriction prevents the accumulation of excessive cash reserves, ensuring that the funds are actively used for the society's operations and development.

Practical Examples

• Scenario 1: A cooperative housing society in Gujarat has a surplus of funds from membership fees and maintenance charges. To prevent these funds from being idle, the society decides to invest a portion in government bonds as per Section 73 of the Act.

• Scenario 2: A cooperative credit society has been accumulating cash reserves beyond the permissible limit as per Rule 90 of the Rules. The Registrar of Cooperative Societies intervenes and directs the society to invest the excess funds in approved avenues.

In conclusion, the Gujarat Cooperative Societies Act, 1961 and Rules contain provisions to ensure that society funds are not kept idle by regulating investments and imposing limits on cash reserves. By adhering to these legal requirements, cooperative societies can effectively manage their finances for the benefit of their members.

References

• Section 73 of the Gujarat Cooperative Societies Act, 1961: Official PDF

• Rule 90 of the Gujarat Cooperative Societies Rules, 1965: Official PDF