KATHMANDU, Nov 24: The government has disallowed registration, service expansion and establishment of service centers for cooperatives of any nature.

The Ministry of Land Management, Cooperatives and Poverty Alleviation (MoLMCPA) has urged authorities concerned to implement the decision taken by the cabinet to suspend the registration, service expansion and permission of service centers related to cooperatives, particularly to those meant for saving and credit services, until  new provisions are made.  

According to the Spokesperson at the MoLMCPA Ganesh Prasad Bhatta, recent developments in the cooperative sector is likely to have adverse effects in  the overall  financial sector and it was decided to put restrictions on saving and credit cooperative business through the Cabinet decision on November 9.

According to the MoLMCPA, there is a concerning trend among many saving and credit cooperatives which are in significant numbers across the country to accept huge deposits and invest in high-risk sectors. Similarly, the cooperative sector is grappling with a financial crisis as members and depositors are facing challenges in retrieving their savings.

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