Conversion of credit society to non-credit society, etc., on failure to comply with prudential requirements
93A.—(1) If, in 2 or more consecutive financial years, a credit society fails to comply with any prudential requirement contained in a written direction issued under section 93(2) within the time specified in that direction, the Registrar may —
(a)
by a subsequent written direction issued under section 93(2), order the society to stop receiving any new deposits after the expiry of a period specified in that subsequent written direction; and
(b)
cancel the registration of the society as a credit society.
[3/2018]
(2) Where the registration of a society as a credit society is cancelled under subsection (1) —
(a)
the society becomes a non‑credit society; and
(b)
the Registrar must notify the society in writing that its registration as a credit society is cancelled, starting on a date specified in the notice.
[3/2018]
(3) A society that becomes a non‑credit society under this section —
(a)
must stop doing any of the following things, starting on such date as the Registrar may determine (being a date that may be different from the date mentioned in subsection (2)(b)):
(i)
make any new loan to any person;
(ii)
allow any new credit to any person;
(iii)
receive any new deposit from any person; and
(b)
must return, to every person from whom the society had received a deposit in accordance with section 68(2) while the society was a credit society, the deposit made by the person (including any interest accrued on the deposit) within 12 months after the date on which the registration of the society as a credit society is cancelled, or such shorter or longer period as the Registrar may determine in any particular case.
[3/2018]
(4) A society that becomes a non‑credit society may continue to receive repayments of existing loans made and credit allowed in accordance with section 67 while the society was a credit society.
[3/2018]
(5) A society that is aggrieved by any decision of the Registrar under subsection (1) may, within 2 months after the date of the Registrar’s decision, appeal in writing to the Minister, whose decision is final.
[3/2018]
(6) Any society that contravenes subsection (3) shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $50,000 and, in the case of a continuing offence, to a further fine not exceeding $5,000 for each day or part of a day during which the offence continues after conviction.