after a boom that had made even new generation banks envious of the cooperative banking system keralas cooperative societies are going through a challenging phase now a series of restrictions imposed by the centre and the reserve bank have almost pushed the societies to the wall four recent decisions that will affect the equilibrium of the cooperative sector have initiated a churning process here it departments strict enforcement of 80t of the it act to levy income tax from cooperative societies amendment in banking regulation act that bans primary cooperative societies from doing banking business rbis directive regarding statutory liquidity ratio slr that may hit the state cooperative bank badly and the 97th amendment of the constitution enacted in 2011 that has made forming a cooperative society a fundamental right of a person the issue primary cooperative societies now face is the change in it rules relaxed it norms had prompted people to park their money in societies in their neighbourhood the societies could play an important role in rural finance as they were equipped with such privileges said planning board member cp john adding that people will find cooperatives a notsotrustworthy option for investment if it rules are implemented he added that the impact of new rule is already visible with funds flowing out of villages v rajasekharan nair treasurer of primary cooperative societies association said it department officials have already begun raids the director boards of many cooperatives wont cooperate with it department till there is clarity on the issue but it officials force bank employees to reveal deposit details recently there were raids in a number of primary societies in malappuram said nair who had served as the private secretary of former cooperation minister g sudhakaran the licence for banking if made strict will be the death knell for many primary cooperatives it wont be practical for our neighbourhood societies as banking licence means backing out from all other businesses said nair the societies cant do chitty business or run neethi medical store if they take banking license in many villages cooperative societies play several roles banker medical and provision stores the state cooperative bank scb the big brother of all cooperatives started countdown for an impending crisis with the rbis new directive that deposits in scb wont be considered as slr of district cooperative banks dcb the rbi has given a deadline of april 2015 to dcbs to deposit slr in commercial banks the impact of this decision will be bigger than one expects as rs 8100 crore of the total deposit of rs 8400 crore in scb has come from dcbs the slr from dcbs will constitute around rs 6000 crore of this while other rs 2000 crore is deposit that can be withdrawn any time if dcbs withdraw their deposit what remains will be only rs 300 crore an alarming situation said m p saju scb director he said the scb has already begun to feel the pinch with dcbs withdrawing rs