The Bait-un-Nasr Urban Co-operative Credit Society Limited was registered on Friday, 1st October 1976, under the Maharashtra State Co-operative Societies Act, 1960 with the Registrar of Co-operative Societies, with the registration number 786 and the Society had been functioning with dedication to the ideals of co-operative service with its unique feature of interest free banking to members for a period of about 25 years from the year 1976 to 2000. It had branches in many localities in the region of Greater Mumbai. Its operations were running very smoothly. It was rendering excellent services to its members and depositors. During this period of 25 years no instance of irregularity or financial misdemeanor was observed. Prior to suspending its operations, the Society was considered as one of the leading co-operative credit societies of Mumbai. It was also acknowledged as the best organized and managed financial institution in the country working on an interest-free basis.
Former Members of the Board of Directors of the Society
The Board of Directors of the Society comprised of dedicated, dynamic and selfless individuals from various professional and social backgrounds who had come together exclusively to serve the interest of the Society. To them goes the credit for the constantly excellent performance of the Society. Prominent among them were….
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Reason for the Society Suspending Operations
The suspension of operations of the Society was occasioned by the unfortunate circulation of unfounded rumors. Members and depositors falling victim to false news reports about the society published by a local newspaper, approached the offices of the Society enmasse, demanding the return of their money. The management of the Society made concerted efforts for immediate return of deposits to dispel the fears of the members and depositors aroused by the false rumours in the hope that they would regain the trust of the members.
However, in spite of all liquidity with the management being consumed the pressure of the members continued unabated. Unfortunately the borrowers of the Society did not rise to the occasion and support the efforts of the management to recall the loans; as a result the Society ran out of funds. In some cases, on not being repaid their deposits immediately, depositors, turned violent. Observing several offices being attacked, the staff of the Society became fearful and refused to report for duty. The management tried to tackle even this grim situation with determination; however, due to the violent behavior of the depositors and absence of sufficient personnel to man the counters they were forced to down the shutters.
Repercussions of Suspending Operations
On finding that the Head Office of the Society had suspended operations, some members and depositors lodged complaints with the Police. The Economic Offences Wing of the Mumbai Police, CID swung into action and began investigating the complaints and interrogating the Directors and Senior Officials of the Society. But they soon reached the conclusion that there had been no conscious wrongdoing on the part of the management and hence handed over the papers to the Deputy Registrar of Co-operative Societies in February 2003 for further appropriate action. The Dy. Registrar decided to place the Society under liquidation. From time to time three liquidators were appointed for liquidation of the Society. But for various reasons, the process though set in motion, could not be effectively carried forward. Many efforts were made by the Board of Directors and some employees of the Society for its revival during this period but the efforts could not succeed.
Recent Developments
In year 2012, some members with the intention of seeing the Society re-start its operations so that the members could again reap the benefits which they had enjoyed from it earlier, approached the dysfunctional Board of Directors of the Society, seeking their co-operation in the mission of re-starting the Society. Since most of the Directors had after the previous 12 years, reached an advanced age and were no longer in a position to take up the enormous responsibility of reconstructing and again running the Society, they expressed the desire that former staff members who had been earlier working at senior levels of management of the Society should be approachedto take over the task. The senior employees consented to shoulder the responsibility to enable the Society to re-start operations.
Most of the senior staff members had been earlier associated with the Society for long periods of the order of 20 years of selfless and sincere service. They had excellent relations with the ordinary members and were well versed with the functioning of the Society and its rules as well as the regulations governing the operations of the Society. They were also fully aware of the genesis of the problem that had led to the suspension of operations and hence best suited to lead the efforts for re-starting the Society by providing the initiative with the necessary expertise and determination. In response to the members’ specific request to help in re-starting the Society, they prepared a detailed scheme for revival of the Society.
The Revival of the Society
The Liquidator and Dy. Registrar agreed for the revival of the Society and called a Special General Meeting of the members on 7th Nov 2012 and presented the revival scheme (to pay off the liabilities of the depositors and creditors by selling some excess real estate assets of the Society, barring any branch premises) which was approved by the members present. The members present in the meeting also elected a new Board of Directors for implementing the revival scheme under the Chairmanship of Mr. Ibrahim Ansari. The Dy. Registrar, Co-operative Societies conducted the due diligence and then issued an Order for Revival of the Society on 21 December 2012.
After getting the Order from The Dy. Registrar, Co-operative Societies, the newly elected Board of Directors opened the Head Office of the Society, situated at Mahim, which was in a very bad and deteriorated condition. All the furniture, and many records and documents were damaged or destroyed due to continuous leakage and infestation by termites during the extended period of closureof the office (since the year 2000).
The management, after getting the office cleaned, renovated it and started the task for revival and reconstruction of the Society. Some employees were appointed. Records and mutilated papers and documents were rearranged and filed. None of the branch premises was opened. However efforts were made to clear the outstanding rental, maintenance, corporation tax and utilities dues and take full control of some branch premises which were either encroached or access to which was being obstructed.Efforts were also made to access and restore earlier digital records of accounts with the Society and install necessary computers and employ software experts to help in accessing the data.
As per the revival scheme, the main initial task of the Board of Directors was to pay off the liabilities of the depositors on priority basis. Funds were required for this purpose. The Board of Directors floated tenders for sale of some of its properties. By God’s grace, the efforts of the management have yielded the desired results and they have succeeded in mobilizing the required funds for the purpose of repaying the deposits of depositors wanting to withdraw.
It is envisaged that the Society will shortlyannounce the program for repaying the deposits. It is intended to start the processof repayment from the Society’s Head Office at Mahim. Members will need to produce necessary documents to establish and file their claims and collect their repayments on the date allotted to them at time of authentication of their claims. Once the processof repayment of outstanding dues of existing depositors is substantially addressed, the Society intends to relaunch its mobilization and funding activitieson interest-freebasis for its members.