The draft of the country´s first cooperatives policy has already been forwarded to the Ministry of Agriculture and Cooperatives for approval. [break]Once endorsed, it will make rounds of various ministries and other government agencies before landing at the Cabinet for final approval.
“The policy is a comprehensive document that has accommodated various cross cutting issues of the cooperatives sector,” Netra Prasad Neupane, member secretary of the NCDB and a member of the team that drafted the policy, told Republica. “We believe it will provide direction to the process of amending the two-decade-old Cooperatives Act, which has become obsolete.”
The cooperatives sector of the country has become diverse over the years. Lately, the country has seen growth of tourism, communications and hydro cooperatives, apart from traditional cooperatives like financial and agricultural.
- Establishment of autonomous body to regulate financial cooperatives
- Formation of deposit guarantee fund and credit information unit
- Encourage merger of cooperatives
- Provision to put cap on number of cooperatives in certain areas
- Formulation of separate act to govern financial cooperatives
Keeping this in view, the draft policy has proposed operation of over 17 different categories of businesses through cooperatives, including schools and universities, and worker-owned industries.
It assigns the responsibility of monitoring these cooperatives to the NCDB, the Department of Cooperatives and the National Cooperative Federation.
“The NCDB will monitor implementation of policies introduced by it and their effectiveness; the department will regulate and evaluate cooperatives, while cooperatives associations will be responsible for inspecting and managing day-to-day operation of cooperatives,” says the draft policy, a copy of which has been obtained by Republica.
To keep a tab on all cooperatives operating in the country, the concerned authority will also make it mandatory for them to submit monthly and annual performance reports, the draft says.
Currently, the number of cooperatives in the country has crossed 23,500. Of this, almost 50 percent are registered as savings and credit cooperatives, which operate in a similar manner like financial institutions.
Since failure of these financial units can inflict huge losses on depositors, the draft has proposed establishment of an autonomous body to properly manage, monitor and regulate cooperatives providing financial services.
“To ensure safety of money parked by depositors, Deposit Guarantee Fund and Credit Information Unit will also be created under the management of cooperative bank and cooperative associations,” the draft says. In case cooperatives are found making transactions beyond stipulated limit, the concerned authority may ask them to meet additional standards, according to the draft.
The draft has also proposed formulation of separate acts on savings and credit cooperatives and National Cooperatives Bank to better govern the cooperatives doing financial transactions.
Keeping in view the mushrooming cooperatives, the draft has laid plans to put a cap on registration of new cooperatives depending on the need of the area. Various programs may also be launched to encourage different cooperatives to merge.
The draft policy promises seed money and soft loans to support opening of cooperatives. In this regard, the Cooperatives Development Fund will also extend support to cooperatives formed by targeted groups. “This Fund will mobilize financial resources by collecting 50 percent of the amount provided by cooperatives and cooperatives associations in forms of taxes,” the draft says.
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