Section 44 in Sikkim Co-Operative Societies Act, 1955
44. Restrictions on Loans.
(1)A registered society shall not give Loans -(a)to any person other than a member except with the general or special sanction, of the Registrar;Provided that a loan may be given to a depositor of the society's on the security of his deposit or,(b)to a member in excess either of the maximum or of the normal credit determined by the society for that member in accordance with its bye-laws;Provided that in assessing normal credit the managing body shall take a full statement as to the member's means of earning.(c)on the security of the movable property or future movable property unless the movable: property is placed with the society.(d)on personal security without sureties, unless the borrowing member has unencumbered immovable property or attachable funded assets sufficient to cower the loan and a full statement of such securities is submitted by the borrower and the truth of the statement is ascertained by the managing body.(e)on personal security with sureties, unless the borrowing member and his sureties together have 'unencumbered immovable property or attachable funded assets sufficient to cover the loan and a full statement of such securities is submitted by borrower and the sureties separately and the truth of, the statements is ascertained by the managing body,(f)on personal security, with or without sureties, unless the loan is for a short period not exceeding the time required to reap the benefit of the loan and in no case exceeding three years.(2)(a)Notwithstanding the 'provisions of, sub-clause (1) (b), (d) and (e) It loan may' be given on personal security provided that the managing body of the society is satisfied as to the credit on the borrower and has taken from him a scheme for the utilization of the loan and has 'ascertained the truth of the statements contained in the scheme and the bona fides of the' borrowing member,(b)the resolution of the managing body granting a loan under this section shall contain the names of all assenting members,(c)notwithstanding the provisions of sub-clauses 1b to f and 2 a and b a registered society may issue a loan on mortgage or valuable security(d)no person shall be accepted as a surety for any borrower unless he is also a member of the same registered society(3)A registered society the primary object of which is not the issue of loans shall open a separate accounting or finance or banking branch in accordance with its bye-laws and frame rules for the conduct of business in such branch before it issues any loans and such rules shall first be approved by the Registrar.
