KATHMANDU, Nov 23: The government is preparing to return deposits of up to Rs 100,000 for depositors affected by troubled cooperatives.
Cooperative victims stage demonstration in Kathmandu (In Pictur...
The Ministry of Land Management, Cooperatives and Poverty Alleviation has drafted a procedure aimed at returning the savings of cooperative victims. A revolving fund is being set up to return the money of citizens who have small amounts stuck in such cooperatives, and the draft procedure has already been sent to the Ministry of Finance.
According to ministry spokesperson Damodar Wagle, once the Finance Ministry approves the procedure, it will be sent to the Ministry of Law for its opinion. After Cabinet endorsement, the process of returning the savings to victims will begin. He said the government plans to refund small savers first to assure affected families that the state stands behind them.
The Ministry of Finance will provide a certain amount as seed capital for the revolving fund. From this fund, money will be released to savers of cooperatives that have been declared problematic. Funds raised from the auction of such cooperatives will also be deposited back into the same revolving fund to maintain financial resources.
Victims have been running national campaigns and forming various committees to demand the return of their deposits. Around 34,000 cooperatives operate across the country. Since these cooperatives are registered under different levels of government, regulation has been challenging. Victims have demanded both the return of their money and action against operators involved in fraud.
While cooperatives that follow cooperative ideals and principles have performed well and served their members, many others that collected savings and disbursed loans in violation of these principles have run into trouble.
