KATHMANDU, June 3: The Rastriya Swatantra Party (RSP) had promised in its election pledge that it would return depositors’ savings within 100 days of forming the government, stating, “To protect citizens’ hard-earned money, we will return savings within 100 days of forming the government.” That promise raised hopes among thousands of depositors whose money remains stuck in troubled cooperatives.
Sixty days into the RSP-led government, victims were expecting concrete relief in the fiscal year 2026/27 budget. However, the budget presented by Finance Minister Dr Swarnim Wagle has failed to address their concerns, leaving depositors disappointed and uncertain about recovery.
The budget book states, “The process of returning savings to depositors of problematic cooperatives will continue through the Integrated Depositor Protection Fund, established as a revolving fund to be reimbursed through the sale of cooperative savings and assets.”
However, no dedicated allocation has been made for the direct refund of deposits. Experts say the budget has failed to prioritise the deepening cooperative crisis.
Former Chairperson of the National Cooperative Regulatory Authority, Khagendra Sharma, said the government has not presented a concrete recovery plan. “It has been nearly a decade since cooperatives began being declared problematic, but depositors are still waiting for their money,” he said.
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He added that while small-scale refunds are a positive step, they are far from sufficient. “If the government truly wants to return depositors’ money, it should acquire assets and compensate victims,” he said. “For that, a separate company should be established.”
According to Sharma, the government should purchase assets mortgaged in cooperatives and use them to repay depositors.
A parliamentary special committee report on cooperative fund misuse (2024) shows that deposits worth Rs 87.89 billion in 40 cooperatives—22 problematic and 18 under scrutiny—are at risk. This affects 62,760 depositors, with the risk expected to rise further as more cooperatives face crisis.
The National Campaign for Protection of Cooperative Depositors estimates that victims across 519 cooperatives are still waiting for nearly Rs 100 billion. Campaign coordinator Labkush KC said around Rs 100 billion is required to fully compensate depositors. “Despite repeated appeals, victims have not received their money,” he said, calling for a special law to resolve the crisis.
He added that the budget’s response was limited to token measures rather than a real solution.
The Ministry of Land Management, Cooperatives and Poverty Alleviation said around Rs 500 million has been allocated in the current fiscal year for refunds, with repayments initiated through a working procedure. However, only deposits up to Rs 10,000 have been returned so far, while victims have lost lakhs and crores.
According to Arjun Paudel, information officer at the Office of the Problematic Cooperative Management Committee, refunds have begun for small depositors. “We have started returning deposits up to Rs 10,000 in the first phase,” he said, adding that around 900 people have already received payments.
Victims, however, say the amount is symbolic compared to their losses, arguing that it does little to address the scale of the crisis. RSP President Rabi Lamichhane has also been linked to cooperative-related cases, though victims allege the government is not treating the issue with urgency.
Weak regulation and poor oversight have been blamed for the crisis, allowing operators to issue unsecured loans and invest in private businesses and real estate, leading to massive financial losses.
Although exact data is unavailable at the Department of Cooperatives, billions in depositors’ savings remain stuck. In some cases alone, losses reach up to Rs 14 billion. Depositors have not recovered Rs 14 billion from Shiva Shikhar Multipurpose Cooperative Ltd, while Rs 8.40 billion remains unpaid from Oriental Cooperative, declared problematic in November 2017.
Other troubled cooperatives include Standard Saving and Credit Cooperative, Pacific Saving and Investment Cooperative, Prabhu Saving and Credit Cooperative, Kohinoor Hill Saving and Credit Cooperative, Consumer Saving and Credit Cooperative, Kuber Saving and Credit Cooperative, Chartered Saving and Cooperative, Vegas Saving and Credit Cooperative, and Standard Multipurpose Cooperative.
Experts say the absence of strong regulation and failure of self-governance mechanisms have deepened the crisis.
The Cooperative Act 2017 and Cooperative Regulations 2018 distribute regulatory authority across three tiers of government, which experts say has weakened oversight and contributed to the current situation.
There are 32,325 cooperatives across the country with over 10.16 million members. The sector holds a share capital of Rs 143 billion, with deposits worth Rs 1.029 trillion and loans worth Rs 950 billion. Experts warn that misuse of unsecured lending and investments in private firms and real estate has pushed many cooperatives into crisis.
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