KATHMANDU, April 4: Nearly half of the 1,900 cooperatives operating under the purview of the Kathmandu Metropolitan City (KMC) have failed to submit their regular reports, according to the KMC's Cooperatives Department.
The failure of many cooperatives to submit reports regularly indicates underlying problems in such institutions. The Department said that out of about 1,900 cooperatives operating within its jurisdiction, only 723 regularly submit annual reports.
Dhruba Kumar Kafle, Chief of the Department, said the Metropolis has been repeatedly requesting the submission of annual reports.
If annual reports are not submitted for a long time under various pretexts, the Metropolis said it is preparing to take legal action against those non-compliant cooperatives.
Kafle said, “Some cooperatives are completely out of contact, while others avoid reporting due to ongoing investigations against them. Cooperatives that have disbursed loans illegally tend not to submit reports regularly."
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According to him, instructions have already been issued to non-compliant cooperatives to conduct their annual general meetings and submit audit reports, decisions of the annual general meetings, and annual reports to the Metropolis’s concerned department.
He added that if cooperatives do not submit general assembly reports for an extended period, they are taken into the liquidation process, which could put depositors’ money at risk.
Thus, the Metropolis first collects reports and only then proceeds with the liquidation process, he explained.
Advisory for depositors
Meanwhile, the KMC has urged depositors not to be lured by gimmicks such as unusually high interest rates offered by some cooperatives.
Kafle called on depositors to verify whether a cooperative is operating legally, conducting regular audits, maintaining financial transparency, and being subject to regular oversight before depositing money.
He suggested, "One must stay away from the mindset that 'this is my friend's cooperative' or 'a relative runs it', so I can deposit money without thorough verification."
"Such assumptions and blind trust could lead to financial loss," he cautioned.
Authorities note that many cooperatives are currently facing problems because they are being run among known individuals.
There are also issues due to the absence of regular legal procedures that should be followed.
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