Section 73 in The Delhi Co-operative Societies Rules, 2007
73. Distribution of profits.
(1)No dividend shall be declared or paid except out of net profits left after making the contribution towards reserve fund required to be made under the provisions of section 53 of the Act. In co-operative society, the dividend shall not exceed eighteen percent per annum on paid-up share capital. Dividend shall be payable at such rate not exceeding this limit to the registered share holders, as may be approved by the general body and not otherwise. Share holders/members will have no right to the dividend unless declared and approved by general body. The dividend shall be paid to all members within three months of the approval by the general body. No dividend shall be paid by the co-operative society while any claim due from the co-operative society to a depositor or lender remains unsatisfied.(2)Notwithstanding anything contained in these rules and the bye-laws of the society, the Registrar may by a general or special order direct that a co-operative society shall not pay dividend or shall pay dividend at a reduced rate.(3)In the case of an agricultural credit co-operative society, ten percent of net profits after contribution to the reserve fund under the proviso to section 53 of the Act, shall be credited to Agricultural Stabilization Fund to be utilised for enabling the borrowers to make postponement of repayment of loans on account of famine, drought, or such other unforeseen causes. Any subsidy for special bad debt reserve given by the Government shall also be credited to this Stabilisation Fund.(4)A distribution of the remaining balance of profits under section 53 of the Act, after the distribution of dividend shall be in accordance with the bye-laws of the society regarding such distribution. It shall be in proportion to the wages earned by each member in the case of a producer's society, and to the amount of goods purchased by each member, or where it is so provided in the bye-law by each member or customer in the case of consumer society. It shall also be proportion to the amount of rent paid by each member in the case of a housing co-operative society, in proportion to the goods obtained or sold through the marketing co-operative society by each member, or to the loans borrowed from and the deposits made with the co-operative credit society by each member.(5)Any co-operative society which pays dividend may also give incentive or gift to its members, with the approval of the general body, not exceeding five per cent of its net profit subject to a maximum of three hundred rupees per member :Provided that directions of the Reserve Bank of India in this behalf shall govern primary urban co-operative banks :Provided further that the co-operative housing societies shall not be eligible to give incentive or gifts.
