The regulators step up monitoring at a time when many cooperatives have landed in financial crisis in the absence of regular monitoring
KATHMANDU, Feb 25: The Department of Cooperatives (DoC) in collaboration with Nepal Rastra Bank (NRB) has started onsite inspection of big cooperatives that have been carrying out huge financial transactions on a daily basis.
According to the DoC, three groups in coordination of the department’s deputy-registrar Tola Raj Upadhyaya have started the onsite inspection of the big cooperatives. For this purpose, the NRB has sent deputy director Ramesh Chaulagain, and officials Ramesh Poudel and Ram Krishna Rai to assist the DoC.
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In the first phase, the joint monitoring teams are carrying out onsite inspections of Gorkha Savings and Credit Cooperative, Ideal Yamuna Savings and Credit Cooperative, Kantipur Savings and Credit Cooperative, Shuva Ratna Savings and Credit Cooperative, Gautam Shree Multipurpose Cooperative, Lali Gurans Multipurpose Cooperative, Hamro Multipurpose Cooperative and Nepal Multipurpose Central Cooperative Union. A number of these have already fallen in the financial crisis and are declared problematic cooperatives by the government.
The Cooperatives Act 2017 has maintained the provisions that the cooperatives with a capital base of more than Rs 500 million are to be regulated by the NRB. However, the central bank has been declining from the task stating that the regulation of cooperatives is not under its scope.
There are over 30,000 cooperatives operating in the country. In absence of poor regulation and weak monitoring, many cooperatives have fallen into financial crisis in recent days. The government has declared over a dozen of cooperatives problematic.
Amid the regulatory bodies including the DoC facing wide criticism for failing to address the problem of the cooperatives, the department has requested for the NRB’s assistance to conduct the onsite inspection of cooperatives. Citing the issues with the cooperatives could drag the entire financial system of the country into similar problems, the DoC has initiated the move, said an official of the DoC.
