Reminder: MCS Rules 2026 Cap Housing Society Borrowing at Ten Times Its Own Funds

No fresh circular or court ruling on housing societies was found today, so this is a reminder of a rule that matters whenever a managing committee considers a bank loan. The Maharashtra Co-operative Societies (Amendment) Rules, 2026, notified on 18 June 2026 and published in the Gazette (Extraordinary) on 22 June 2026, added Chapter XI-B (Rules 106C-1 to 106C-14) for co-operative housing societies. Rule 106C-10 deals with how much a society may borrow.

What the borrowing limit says

According to a plain-English summary of the rules by CA Satish Borkar, a society's total borrowing generally may not exceed ten times a base made up of its paid-up share capital, reserve fund, members' contributions towards land and building, and building fund, reduced by any accumulated losses. In simple terms, the more a society has built up in its own funds, the more it can borrow, and accumulated losses shrink that headroom.

Self-redevelopment is measured differently

For societies carrying out self-redevelopment or self-development, the same summary states that borrowing can go up to ten times the value of the land, based on a valuation report from a Government-approved valuer. This is a separate yardstick from the general limit above and applies only to that purpose.

What this means for housing societies

• Before approaching a bank, the secretary and treasurer should work out the borrowing base from the latest audited balance sheet, deducting accumulated losses.
• A society with large accumulated losses or thin reserves may find its permitted borrowing much lower than expected.
• Societies planning self-redevelopment should obtain a valuation from a Government-approved valuer, since the land-value limit depends on that report.
• Any proposal to borrow should still go through the general body in the usual way and be recorded in the minutes.

The summary is a secondary explanation, not the Gazette text, and it does not state a commencement date for the chapter or the exact wording of the rule. Committees should read Rule 106C-10 in the notified text, or consult their auditor, before relying on the figures above.