(1) No part of the funds, other than net profits, of a multi-State co-operative society shall be divided by way of bonus or dividend or otherwise distributed among its members.
(2) The net profits of a multi-State co-operative society referred to in sub-section (1) in respect of a society earning profits shall be calculated by deducting from the gross profits for the year, all interest accrued and accruing in relation to amounts which are overdue, establishment charges, interest payable on loans and deposits, audit fees, working expenses including repairs, rent, taxes and depreciation, bonus payable to employees under the law relating to payment of bonus for the time being in force, and equalization fund for such bonus, provision for payment of income-tax and making approved donations under the Income-tax Act, 1961, development rebate, provision for development fund, bad debts fund, price fluctuation fund, dividend equalization fund, share capital redemption fund, investment fluctuation fund, provision for retirement benefits to employees, and after providing for or writing off bad debts and losses not adjusted against any fund created out of profit :
Provided that such society may. add to the net profits for the year, interest accrued in the preceding years, but actually recovered during the year :
Provided further that in case of such multi-State co-operative societies as do not have share capital, the surplus of income over expenditure shall not be treated as net profits and such surplus shall be dealt with in accordance with the bye-laws.
Section 61 - Disposal of net profits
(1) A multi-State co-operative society shall, out of its net profits in any year - '
(a) Transfer an amount not less than twenty-five per cent to the reserve fund; and
(b) Credit such portion, as may be prescribed, to the co-operative education fund maintained by the National Co-operative Union of India Limited, New Delhi.
(2) Subject to such conditions as may be prescribed, the balance of the net profits may be utilised for all or any of the following purposes, namely :-
(a) Payment of dividend to members on their paid-up share capital at a rate not exceeding the prescribed limit;
(b) Constitution of or contribution to such special funds including education funds, as may be specified in the bye-laws;
(c) Donation of amounts not exceeding five per cent of the net profits for any purpose connected with the development of co-operative movement or charitable purpose as defined in section 2 of the Charitable Endowments Act, 1890;
(d) Payment of exgratia amount to employees of the multi-State co-operative society to the extent and in the manner specified in the bye-laws.
(3) The funds of a multi-State co-operative society shall not be utilized for any political purpose.
Section 62 - Investment of funds
A multi-State co-operative society may invest or deposit its fund-
(a) In a co-operative bank. State co-operative bank, co-operative land mortgage bank, co-operative land development bank or Central Co-operative Bank; or
(b) In any of the securities specified in section 20 of the Indian Trusts Act, 1882; or
(c) In the shares or securities of any other multi-State co-operative society or any co-operative society; or
(d) In the shares, securities or assets of any other institution, with the previous approval of the Central Registrar; or
(e) With any bank; or
(f) In such other mode as may be prescribed.
Section 63 - Restriction on loans
(1) A multi-State co-operative society, other than a co-operative bank, shall not make a loan-
(a) To a member on the security of his share or on the security of a non-member, or
(b) To a non-member provided that with the general or special sanction of the Central Registrar, a multi-State co- operative society may make loans to another multi-State co-operative society.
(2) Notwithstanding anything contained in sub-section (1), a multi-State co-operative society may make a loan to a depositor on the security of his deposit.
Section 64 - Restrictions on borrowing
A multi-State co-operative society shall receive deposits and loans only to such extent and under such conditions as may be specified in the bye-laws:
Provided that a co-operative bank shall be governed by the provisions of the Banking Regulation Act, 1949.
Section 65 - Restrictions on another transactions with non-members
Save as provided insections63 and 64-, the transaction of a multi-State co-operative society with any person other than a member shall be subject to such prohibitions and restrictions, if any, as may be prescribed.
Section 66 - Contributory provident fund
(1) A multi-State co-operative society having such number or class of employees as maybe prescribed may establish a contributory provident fund for the benefit of such employees to which shall be credited all contributions made by the employees and the society in accordance with the bye-laws of the society.
(2) Monies standing to the credit of any contributory provident fund established by a multi-State co-operative society under sub-section (1) shall not-
(a) Be used in the business of the society;
(b) Form part of the assets of the society;
(c) Be liable to attachment or be subject to any other process of any court or other authority.
(3) Notwithstanding anything contained in this section, a provident fund established by a Multi-State co-operative society to which the provisions of the Employees' Provident Funds and Miscellaneous Provisions Act, 1952, apply, shall be governed by that Act.