State government faces embarrassment as Council rejects Souharda Co-op Bill

The State government on Wednesday faced an embarrassing situation in the Legislative Council when the Opposition BJP and JD (S) voted down the Karnataka Souharda Sahakari (Amendment) Bill, 2025, that was passed in the Assembly. 

Karnataka Governor Thaawarchand Gehlot had earlier this year returned this Bill, along with the Karnataka Cooperative Societies (Amendment) Bill, 2024, to the State government, requesting reconsideration and modifications. The Governor had deemed the government’s previous clarifications on these Bills as “not satisfactory”.

Why the Bill

Presenting the Bill, Law and Parliamentary Affairs Minister H.K. Patil said that it provides for maintaining 20% of the total deposits as State statutory liquid reserve (SLR) to manage increasing cases of misappropriation.

“Apart from provisions for maintaining a statutory liquid reserve, the Bill introduces a requirement for candidates, directors, and Chief Executive Officers to declare their assets and liabilities at the end of each year to promote transparency and accountability,” Mr. Patil said, pointing out that amendments were being made to define voting rights, election procedures, and management structures of cooperative societies. 

Annual declaration

However, the Opposition members objected to the annual declaration of assets and liabilities and a few other clauses. “Banks with RBI approval should be free to deposit funds where a higher interest is available. Reserving 20% of deposits under SLR is unnecessary. Already, in many cooperatives, members struggle to withdraw their own deposits, often forced to withdraw money in instalments,” the members said.

Although Mr. Patil assured the House that the annual declaration could be changed to once every two years, the Opposition members demanded that the Bill be put to a vote. 

Chairman Basavaraj Horatti, who did a count of those in favour and against the Bill, announced that 23 legislators were in favour while 26 were against it. Hence, the Bill has been rejected, he said.