KATHMANDU, Jan 22: A total of 6,266 depositors submitted applications to the Cooperative Department of the Kathmandu Metropolitan City demanding the return of savings amounting to Rs 4.49 billion.
Depositors of 118 cooperatives have demanded their savings back, prompting the metropolitan city office to refer these cases to the police for investigation and further action.
Following the complaints, the metropolis held discussion on the current challenges as well as solutions to the problems of the cooperative sector with higher authorities.
Namraj Dhakal, the head of the metropolis’ Cooperative Department, discussed this issue with Pitambar Ghimire, the registrar of the Department of Cooperatives under the federal government on Tuesday.
"The metropolitan city has 1,917 cooperatives. Among them, 1,744 are registered in the Cooperative and Poverty Management Information System (COPMIS), but only 838 have submitted their annual reports," said Dhakal.
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Dhakal stressed the need for coordination between the federal and local governments on managing cooperatives that are out of contact, addressing cooperatives declared problematic by the metropolis, establishing a credit information center, implementing savings and credit protection funds, and setting up a loan recovery tribunal.
The federal Department of Cooperatives manages 147 cooperatives, while 3,207 cooperatives operate within the Bagmati Province.
During the discussion, Registrar Ghimire urged the metropolitan city to form a Crisis ‘Management Committee for Cooperatives’ to begin the management process.
He urged Dhakal to study the status of cooperatives within the jurisdiction of KMC, verify the situation with accurate data, and design the metropolis’ own framework for monitoring and management.
"Government bodies can manage cooperatives effectively through coordination," said Ghimire.
He also encouraged the metropolitan city to draft laws in line with federal regulations to establish proper procedures for utilizing the Metropolitan Cooperative Promotion Fund.
During the discussion, Sushil Subedi, chief of the Cooperative Regulation Division at the metropolitan city, criticized the Provincial Cooperative Department for merging five cooperatives within the metropolitan city's jurisdiction without consultation.
"We have the files of these cooperatives. How did the province merge cooperatives whose files are with us? They neither consulted nor informed us. We only learned about the merger when the cooperatives themselves came to us, claiming they had been merged," said Subedi.
Subedi further stated that the merger seems to have occurred without conducting a Due Diligence Audit (DDA). “How did these cooperatives, which handle financial transactions, get merged without analyzing financial and managerial opportunities, liabilities, risks, and management? How could the province merge them without consulting the metropolitan city? We are genuinely astonished," Subedi said, adding this as a clear example of the coordination gap.
During the discussion, Deputy Registrars Raghunath Mahat and Shashi Kumar Lamsal emphasized the need for inter-governmental coordination in managing the cooperative sector. They highlighted that local governments shoulder a significant portion of the responsibility.
