As amendment of the antiquated Indian Trust Act 1882 by Government of India. Now CHS can invest in Debt or Equity Mutual Fund
MCS ACT 1960 Sec. 70. Investment of funds.- A society shall invest or deposit its funds in one or more of the following:-
(a) in a Central Bank or the State Co-operative Bank;
(b) in any of the securities specified in section 20 of the Indian Trusts Act, 1882;
(c) in the shares, or security bonds, or debentures, issued by any other society with limited liability and having the same classification to which it belongs:
Provided that, no society shall invest more than such proportion of its paid up share capital as may be prescribed:
Provided further that, the provisions of this clause shall not apply to any investment made by any agricultural credit society in any processing society based on agricultural produce.
(d) in any co-operative bank (other than those referred to in clause (a) of this section) or banking company, approved for this purpose by the Registrar, and on such conditions as the Registrar may from time to time impose;
(e) in any other permitted by the rules, or by general or special order of the State Government.
Section - 20, Indian Trusts Act, 1882
Investment of trust-money.
20. Where the trust-property consists of money and cannot be applied immediately or at an early date to the purposes of the trust, the trustee shall, subject to any direction contained in the instrument of trust, 2[make investments as expressly authorised by the instrument of trust or in any of the securities or class of securities] as specified by the Central Government, by notification in the Official Gazette :
Provided that where there is a person competent to contract and entitled in possession to receive the income of the trust-property for his life, or for any greater estate, no investment 3[***] shall be made without his consent in writing.
Explanation.—For the purposes of this section, the expression "securities" shall have the same meaning as assigned to it in clause (h) of section 2 of the Securities Contracts (Regulation) Act, 1956.]
New Delhi, the 21st April, 2017