The government’s plan to refund the savings of cooperative victims has offered some glimmer of hope to the otherwise troubled sector. The new development comes after the Ministry of Land Management, Cooperatives, and Poverty Alleviation came up with a new process for refunding small savers via a revolving fund, and it has already reached the Finance Ministry level. After it undergoes all the requisite steps, the refunding process will start from families who had deposited small amounts of money, up to Rs. 100,000, and have continuously waited for what feels like an eternity to receive their savings back. The concept of seed money from the Finance Ministry being reused by filling it up again via auctions of assets of the fraudulent as well as troubled cooperatives makes the refunding process easier for the government. To better understand this situation, it must be noted that there have been numerous victims who have been organizing protests and forming committees to convince officials to do something about these issues. They have seen their savings held up in cooperatives that failed due to mismanagement, corruption, and scams. The presence of about 34,000 cooperatives organized in varied layers of the government and developed under their own regulations created such an environment where less monitoring existed along with increased loopholes. Some cooperatives were true to their cooperative principles and members, but many others acted in a manner as if depositors’ money belonged to their personal cash box.
Cooperative victims stage demonstration in Kathmandu (In Pictur...
For a long time, there had been talk about the role of ministers, legislators, and high-profile individuals in turning cooperatives into troubled institutions through their political connections and protecting them from investigations. When cases of scams started pouring in, families realized how some powerful leaders had their own interests come first instead of protecting the interests of depositors who entrusted their money to these cooperatives. The fact that the victim’s money remained stuck in cooperatives associated with famous persons undermined the whole principle of such cooperatives. In order to regain trust, the Sushila Karki government has initiated refunding deposits, though in small amounts. While refunding deposits helps to relieve immediate pain, fundamental issues pertaining to cooperatives have yet to be addressed. Strong legislation and better supervision must be introduced to stop the rot in the cooperative sector.
Also needed is to clean up this sector through other bold actions. To ensure cooperatives lose their political patronage, elected officials should be prohibited from sitting on the boards of cooperatives whose main business is maintaining their members’ savings and loan transactions. To make supervision easier and allow early intervention to prevent fraudulent acts, supervisors must be better equipped to monitor transactions and lending to act early to correct issues. Cooperative members, who are small depositors, do save money because it will help them as well as their cooperatives. Sadly, the depositors of all hues have not had positive thoughts about their government for several years as they continued to suffer due to mismanagement and swindling by those protected by the high and mighty and those who took advantage of legal loopholes. Now, the government’s schemes to return deposits make several victims feel their voices have been heard and counted.
