14 January 2011
Cooperative Societies and Banks are not allowed to invest their money in Mutual Funds and also in FD's of Private companies. As for as Cooperative Banks are concerned, they can not invest in another Cooperative Banks. They can in invest in Schedule Banks, Government Securities and in the securities as prescribed under Sec.20 of Indian Trust Act, 1882. Reserve Banks has allowed the Cooperative Banks to invest 5% of their incemental Deposits in Mutual funds.
As for as Credit and othe cooperative Banks r concerned, they cannot invest in Mutual funds as allowed by RBI for Banks. They can only invest in Cooperative Banks, DCCB's, Securities prescribed unde Sec.20 of trust Act, Schedule Bnaks etc.
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