29. Restrictions on loans.—(1) A registered society shall not make a loan to any person other than
a member:
Provided that, with the general or special sanction of the Registrar, a registered society may
make loans to another registered society.
(2) Save with the sanction of the Registrar, a society with unlimited liability shall not lend money on
the security of moveable property.
(3) The State Government may, by general or special order, prohibit or restrict the lending of money
on mortgage of immoveable property by any registered society or class of registered societies.
30. Restrictions on borrowing.—A registered society shall receive deposits and loans from persons
who are not members only to such extent and under such conditions as may be prescribed by the rules
or by-laws.
31. Restrictions on other transactions with non-members.—Save as provided in sections 29 and
30, the transactions of a registered society with persons other than members shall be subject to such
prohibitions and restrictions, if any, as the State Government may, by rules, prescribe.
32. Investment of funds.—(1) A registered society may invest or deposit its funds—
(a) in the Government Savings Bank, or
(b) in any of the securities specified in section 20 of the Indian Trusts Act, 1882 (2 of 1882), or
(c) in the shares or on the security of any other registered society, or
(d) with any bank or person carrying on the business of banking approved for this purpose by the
Registrar, or
(e) in any other mode permitted by the rules.
(2) Any investments or deposits made before the commencement of this Act which would have been
valid if this Act had been in force are hereby ratified and confirmed.
1. Added by Act 38 of 1920, s. 2 and the first Schedule Pt. I.
2. Subs. by the A. O 1937, for “L.G.”.
3. Added, ibid.
4. Ins. by the A.O. 1950.
5. Subs., ibid., for “Item 59”.
6. Subs., ibid., for “the Government of India Act, 1935”.
7. For s. 28A ins. in the U.P., see the Co-operative Societies (U.P. Amendment) Act, 1944 (U.P. 1 of 1944) as continued in
force by the U.P. Expiring Laws Continuance Act, 1948 (U.P. 13 of 1948).
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33. Funds not to be divided by way of profit.—No part of the funds of a registered society shall be
divided by way of bonus or dividend or otherwise among its members:
Provided that after at least one-fourth of the net profits in any year have been carried to a reserve
fund, payments from the remainder of such profits and from any profits of past years available for
distribution may be made among the members to such extent and under such conditions as may be
prescribed by the rules or by-laws:
Provided also that in the case of a society with unlimited liability no distribution of profits shall be
made without the general or special order of the State Government in this behalf.
34. Contribution to charitable purpose.—Any registered society may, with the sanction of the
Registrar, after one-fourth of the net profits in any year has been carried to a reserve fund, contribute an
amount not exceeding ten per cent. of the remaining net profits to any charitable purpose, as defined in
section 2 of the Charitable Endowments Act, 1890 (1 of 1890).