KATHMANDU, May 29: Cooperative organizations have been found issuing loans of up to Rs 140 million to a single cooperative member breaching the norms of the government law in the segment.
The report unveiled by the Cooperative Irregularities Investigation Commission (CIIC) has underlined that regulatory failure, lack of record-keeping system and lack of good governance practices for decades have adversely affected the sector, which is considered to be one of Nepal’s three economic pillars.
The Sushila Karki led interim government formed the CIIC on January 16, under the Inquiry Commission Act, 1969. The commission was mandated to thoroughly examine regulatory failures, institutional misconduct, and systemic weaknesses across the cooperative sector and submitted its detailed report, which was released on Thursday.
Regulator of cooperative sector seeks details of money lent by...
The commission has come up with the details of the officials involved in the work of registering cooperative organizations, expanding the scope of work, giving approval to open and adding service centers and branch offices, and unifying cooperative organizations.
The CIIC’s study has found that a number of cooperatives gave a loan of up to Rs 10 million to a single person on the same day. The concerned debtors were paid the total amount through breakdown on the single day while issuing loans by the cooperatives.
The commission has sought a detailed investigation on the officials of the regulatory bodies including the Department of Cooperative, and the directors of the cooperatives and the cooperative agents involved in the registration of the cooperatives, expansion of the scope of work, approval for the opening and addition of service centers and branch offices and unification process of the cooperatives.
The six-member commission led by former High Court Judge Binod Prasad Sharma include former first-class gazetted officers Binod Prasad Sharma and Nabaraj Sapkota, cooperative law expert Punya Prasad Dangal, and sector specialists Nawraj Simkhada from Dhading and Basanta Bahadur Shakya from Kathmandu as members.
The commission has adopted a mixed research methodology, combining qualitative and quantitative approaches. It reviewed physical files and old documents from regulatory offices, analyzed previous commission reports, Supreme Court decisions, and relevant literature.
According to the Cooperative Problem Management Committee, many cooperatives have failed to return payments to depositors, with some stalled for more than a decade. Savings worth Rs 46 billion belonging to 76,000 depositors remain pending.
Since the Balen Shah-led government assumed office, it has begun streamlining regulations in the sector and initiated repayments to depositors. So far, Rs 1.4 million has been disbursed to 378 depositors.
However, the government faces mounting criticism over its plan to inject Rs 40 billion from state coffers into a revolving fund to repay victims of troubled cooperatives. Critics argue the move misuses taxpayers’ money at a time when revenue collection is sluggish and the state is struggling to meet immediate financial liabilities.
