Frequently Asked Questions.

The Central Railway Employees Co-Operative Credit Society Ltd. is a Co-Operative Society registered under Maharashtra State Credit Co-Operative Societies Act 2001. by Registration no. 724/CL/2010. The Central Railway Employees Co-Operative Credit Society Ltd. strictly abides by the State Credit Co-Operative Societies Act.,2001 and doing Finance bussiness among society members.

The Society uses the funds in lending to the members and investments as per the societies act/rules/by-laws. Our lending is in the shape of small loans for business & Micro Finance.

Yes, because Government of India has framed the laws/rules to ensure the security and safety of deposits and we strictly abides by the rules and regulations framed by Central Government.
The Multi- State Co-Operative Societies Act, 2002,provides as under

Rule 66 - Restriction on loans – (1) A multi- State co- operative society, other than a co- operative bank, shall not make a loan to a member on the security of his share or on the security of a non-member.

Rule 67 - Restriction on borrowing – (1) A multi- State co-operative society may receive deposits, raise loans and receive grants from external sources to such extent and under such conditions as may be specified in the bye-laws: Provided that the total amount of deposits and loans received during any financial year shall not exceed ten times of the sum of subscribed share capital and accumulated Reserves. Provided further that while calculating the total sum of subscribed share capital and accumulated Reserves, the accumulated losses shall be deducted.

There are variety of natural and financial reasons which help the society in offering better Rate of Interest. A few of them are detailed below:

• Income earned by the society on account of Interest on loans/ advances granted to members which contributes a major part of society’s Income is exempt from Income Tax as per section 80P of Income Tax Act. Therefore the society is able to save huge amount which could have otherwise been paid as Tax. The Board of Directors of the society always felt that some portion of this should be passed on to the members by offering higher Rate of Interest and this is what our corporate philosophy is.
• C.R.R. Cash Reserve Ratio :- Banks and other financial institutions have to keep about 4 to 5 percent of their deposits in cash or with Reserve Bank of India as per R.B.I. regulations. Amount so kept does not earn any interest and reduces the banks’ capacity of lending. While we are exempted from this provision , we keep minimum cash in hand to meet the day to day requirements and therefore are in a position to lend more.
• Society is extending short term & medium term loans to its members. Our loans are fully secured and our recovery is hundred percent. We have no N.P.A’s in our books. On the other hand Banks’ resources are adversely affected by large scale Non Performing Assets and as a result these institutions have lesser funds at their disposal and are not able to offer good Rate of Interest to depositors.
• S.L.R. Statutory Liquidity Ratio :- Banks have to keep almost 25 to 30% of their deposits in different type of securities which earn them less interest as compared to the Rate of Interest prevailing in the market.
• As is evident, banks spend huge amounts in the shape of misc. exp. And establishment cost. As compared to banks and N.B.F.Cs’ our operational cost is very low and the benefit of this also is being passed on to the members in the shape of higher Rate Of Interest.