Section 64 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 64 lists the places where a multi-State co-operative society may invest or deposit its funds. In 2023 clause (b) was substituted to name Government and public sector securities, clause (d) was narrowed to institutions in the same line of business, and clauses (e) and (f) were replaced with a scheduled-or-nationalised-bank rule and a residual power for the Central Government. This article states the section as per the Ministry of Cooperation copy of the Act read with the Multi-State Co-operative Societies (Amendment) Act, 2023.
A society "may invest or deposit its funds" in six listed ways: a co-operative bank, Government and public sector securities, shares or securities of another co-operative society, shares, securities or assets of a subsidiary or other institution in the same line of business, any other scheduled or nationalised bank, or such other manner as may be determined by the Central Government. An investment made in contravention of section 64 or the bye-laws can bring imprisonment of one month to one year or a fine on the board or responsible officers under section 104(5)(b).
The section as it reads after 2023
Section 64 opens: "A multi-state cooperative society may invest or deposit its funds—". The word is "may", so the section permits and limits; it does not require investment. The six modes are:
| Clause | Where the funds may go |
|---|---|
| (a) | in a cooperative bank, state cooperative bank, cooperative land development bank or central cooperative bank |
| (b) | (substituted 2023) in any of the securities issued by the Central Government, State Government, Government Corporations, Government Companies, Authorities, Public Sector Undertakings or any other securities ensured by Government guarantees |
| (c) | in the shares or securities of any other multi-state cooperative society or any cooperative society |
| (d) | in the shares, securities or assets of a subsidiary institution or any other institution in the same line of business as the multi-State co-operative society (words added 2023) |
| (e) | (substituted 2023) with any other scheduled or nationalised bank |
| (f) | (substituted 2023) in such other manner as may be determined by the Central Government |
If your society is reviewing its treasury policy against this list, our legal consultation team can help you map each holding to a clause.
Clause by clause
Clauses (a) and (c): co-operative banks and other co-operatives
Clause (a) names four kinds of co-operative bank. Clause (c) allows shares or securities of "any other multi-state cooperative society or any cooperative society". These two clauses were not changed in 2023.
Clause (b): Government and public sector securities
The 2023 Act substituted this clause. It now covers securities "issued by" the Central Government, State Government, Government Corporations, Government Companies, Authorities and Public Sector Undertakings, and "any other securities ensured by Government guarantees". The list is broad. The Act does not define "Authorities" or "Public Sector Undertakings" here, and does not list the securities by name.
Clause (d): the same line of business
The 2023 Act added, after the words "any other institution", the words "in the same line of business as the multi-State co-operative society". As printed, the new words follow "any other institution", and on a plain reading they qualify that phrase; the Act does not say whether they also qualify "subsidiary institution". We quote and do not guess. The result for a non-subsidiary institution is a business-nexus test: the society cannot put its funds into shares, securities or assets of an unrelated business.
Clause (e) and its Explanation: scheduled or nationalised banks
Clause (e) reads: "with any other scheduled or nationalised bank." The Explanation defines two terms:
- "scheduled bank" has the same meaning as assigned to it in clause (e) of section 2 of the Reserve Bank of India Act, 1934 (2 of 1934); and
- "nationalised bank" means a corresponding new bank constituted under sub-section (1) of section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) and the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980).
Check the current law for the corresponding provisions of these Acts. The sub-clause (ii) of the Explanation ends with "; or" in the gazette, which is a printing oddity because the Explanation is followed by clause (f); we flag it as printed. For a co-operative bank the Act says nothing more here about the Reserve Bank or the Banking Regulation Act, 1949.
Clause (f): other manner
The residual clause now reads "in such other manner as may be determined by the Central Government". Before the amendment the residual mode was one "provided in the bye-laws". The Central Government decides; no determination is in the sources and none is described here.
The link with section 104
The 2023 Act inserted a new sub-section (5) in section 104. Clause (b) of that sub-section applies where a multi-State co-operative society "makes any investment in contravention of the provision of section 64 or the bye-laws made under this Act". In that case "the board of directors or the responsible officers of the multi-State co-operative society shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to one year or with fine which shall not be less than five thousand rupees but may extend to one lakh rupees or with both." Section 104 is explained in a separate note on offences and penalties. Section 64 and the bye-laws together therefore set the boundary of lawful investment.
Funds invested in accordance with section 64 and the bye-laws also gain a protection: the reserve fund, bad debt reserves and employees' provident fund so invested are not liable to attachment under section 56(2); see our note on charge and set-off and bar on attachment.
A practical example
Surya Multi-State Co-operative Society has surplus funds. Its board places part in a fixed deposit with a scheduled bank (clause (e)), part in securities issued by a State Government (clause (b)), and part in shares of a company that makes industrial machinery. The society is a dairy marketing society. The shares are not in the same line of business as the society, so clause (d) does not cover them, and no other clause does either on the text. If the investment is made in contravention of section 64, section 104(5)(b) provides for punishment of the board or responsible officers.
What the 2023 Amendment Act changed
| Provision | Before | After |
|---|---|---|
| s.64(b) | Securities specified in section 20 of the Indian Trust Act, 1882 (2 of 1882) | Securities issued by the Central Government, State Government, Government Corporations, Government Companies, Authorities, Public Sector Undertakings or other securities ensured by Government guarantees |
| s.64(d) | Shares, securities or assets of a subsidiary institution or any other institution | Adds "in the same line of business as the multi-State co-operative society" |
| s.64(e) | "with any other bank", with a longer definition of bank | "with any other scheduled or nationalised bank", with the Explanation above |
| s.64(f) | "in such other mode as may be provided in the bye-laws" | "in such other manner as may be determined by the Central Government" |
Check the current law for the corresponding provision of the Indian Trust Act, 1882. The 2023 Amendment Act is Act 11 of 2023 and came into force on 3 August 2023 by notification S.O. 3493(E).
Need help with treasury and investment policy?
A society that holds surplus funds should be able to show, for each investment, the clause of section 64 and the bye-law it relies on. Our legal consultation team can help you build that record and check it before the audit.
Key takeaways
- Section 64 lists six modes in which a society may invest or deposit its funds.
- Since 2023, clause (b) covers Government and public sector securities and clause (e) any other scheduled or nationalised bank.
- Shares, securities or assets of other institutions must be in the same line of business as the society.
- The Central Government may determine other manners of investment.
- Investment in contravention of section 64 or the bye-laws attracts section 104(5)(b).
Read next
- Offences and penalties (section 104)
- Disposal of net profits and the co-operative education fund (section 63)
- Restrictions on contributions, loans and borrowings (sections 65 to 67)
- Multi-State Co-operative Societies Act, 2002: complete guide
Disclaimer: Based on the Ministry of Cooperation copy of the Multi-State Co-operative Societies Act, 2002 read with the Multi-State Co-operative Societies (Amendment) Act, 2023 (in force from 3 August 2023), as consulted on 2 October 2026. The Multi-State Co-operative Societies Rules, 2002 as amended, later notifications and later amendments are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.