Officials at NRB said conducting monitoring and supervising on hundreds of big SCCs is not possible through NRB, which has been struggling to regulate even the comparatively better-managed Banks and Financial Institutions (BFIs).[break]
“Existing human resources available at NRB are not sufficient for effectively supervising and monitoring the hundreds of big SCCs, where anomalies and irregularities are rife. Hence, what we can do is forge coordination with the Department of Cooperatives (DoC), strengthening its capacity to regulate such cooperatives,” a senior official at NRB told Republica on Thursday.
On the back of the weak supervision and monitoring capacity of a resource strapped DoC--the regulating agency for cooperatives, the government announced in the budget that it is to introduce a provision under which NRB would carry out supervision and monitoring of SCCs having annual transactions of more than Rs 50 million, in association with DoC. Of the total 22,646 cooperatives registered, more than 10,500 are SCCs operating across the country.
According to Keshav Bahadur Thapa, chief of Division Cooperatives Office, Kathmandu, the number of SCCs with more than Rs 50 million in annual transactions is estimated at around 800 across the country, of which around 500 are operating in the capital.
The source said NRB was ready to extent technical support, impart training and depute necessary human resources to enhance DoC´s capacity to supervise and monitor the SCCs. “We are also ready to support DoC to resolve the problems relating to SCCs and upgrade DoC staff to boost monitoring and supervision capacity at DoC in the coming days,” the source added.
Since last year, NRB has been partially supporting DoC in monitoring and supervising big SCCs amid reports that SCCs have been flouting exiting laws and cooperatives standards by lending and investing in insecure and vulnerable sectors like real estate and housing.
Sudarshan Dhakal, registrar at DoC, said monitoring and supervision of SCCs would be developed soon in consultation with NRB, the Ministry of Finance (MoF) and DoC. “We are coming up with a concrete plan soon for effective monitoring and supervision of SCCs through a joint supervision mechanism of DoC, MoF and NRB,” said Dhakal.
Amid growing anomalies and weak monitoring, a high-level government panel has already suggested to the government to establish a separate ministry to oversee and govern the rapidly expanding cooperatives sector. In view of the expanding scope of cooperatives, the panel has suggested to the government to formulate short-term and long-term programs to cope with the new challenges and conduct effective monitoring in the sector.
A recent survey on Organization and Management (O&M) at DoC had suggested that the government raise the department´s workforce to around 800 from the existing 175.
According to a conservative estimate, financial cooperatives across the country have mobilized deposits of over Rs 150 billion from the general public.
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