India is celebrating centenary celebration of Cooperative Law. The first Cooperative Law of India The Cooperative Credit Societies Act, 1904 was passed on 25th March 1904. Agricultural Credit Cooperative Society, of Kanaginahal village of Gadag District in Karnataka was the first cooperative Society formed under First Cooperative law of India.


The earliest co-operatives were set-up among the weavers, in other words workers in cottage industries, who were the first and the hardest hit by the development of the mercantile economy and the industrial revolution.


The members comprise of two categories:

  1. Those originally registered under Karnataka Cooperatives Societies Act 1959 and converted to the new act.
  2. The societies are newly registered directly under the Karnataka Souharda Sahakari Act 1997.

The Cooperatives registered under Karnataka Cooperative Societies Act, 1959 can themselves convert to KSS Act if they do not have Government share capital, loan, subsidy and any type of assistance.

It is interesting to note that newly registered cooperatives have adopted innovative concepts and attempted to enter into new areas hitherto not explored by commercial attempts. For example, at least three cooperatives have been registered with the objective of pro-moting educational institutions. Vijnaneshwara Souharda Sahakari, Gulbarga is devoted to promotion of research and public aware-ness, led by eminent personalities including former Chief Justice of Punjab and Haryana High Court and former Governer of Bihar and Jarkhand Justice M. Rama Jois. This is an example of how organizations understand the importance of

  • Local initiative
  • Social responsibility
  • Commercial sustainability

Self Help Cooperatives - Micro Credit to MicroBanking

Many NGO's who themselves engaged in promoting self help Groups are exploring KSS Act to institutionalize the SHG's. A new kind of cooperatives Self Help Cooperatives have been established in many places. Self help groups organized under SASHAKTI project of Karnataka State Women’s' Development s and funded by World Bank have been institutionalized under Karnataka Souharda Sahakari Act. 52 self help cooperatives registered in 7 districts.

A reputed NGO of Karnataka, BAIF, Karnataka Watershed Development Programme and many other NGO involved in promoting SHG's are also exploring possibilities of Self Help cooperatives.

SAHACHARA, a NGO is involved in promoting Self help cooperatives in Raichur and Koppal districts. Sahachara already promoted 26 Self help cooperatives amongst rural women.

Federal Cooperative is also supporting these kind of innovative experiment and also drafted model byelaws for Self help cooperatives.


The basic guidelines for the formation of Co-operatives under Karnataka Souharda Sahakri Act, 1997 are as follows:

  • Promoters meeting
  • Collecting initial share capital
  • Registration
  • Election to first Board
  • Beginning of activities

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