Revised budget tightens noose on cooperatives

KATHMANDU, September 11: The government is making it mandatory for the cooperatives to invest 50 percent of their loans in agriculture.

Through the substitution bill, the government has asked the largely unregulated sector to implement the provision. The cooperatives can relocate their financial resources via establishing subsidiary organizations.   

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Similarly, the bill has also sought to carry out effective monitoring of the cooperatives’ transactions. “Policies and a mechanism will be formed for the inspection and monitoring of the cooperatives,” reads the substitution bill that the government has tabled at parliament.

Of around 29,000 cooperatives in the country, most have been doing the banking business despite taking licenses for productive businesses. Similarly, the lack of effective monitoring of the sector has led to a high risk of the people’s money deposited in the cooperatives. So far, the government has declared around a dozen cooperatives as problematic after they failed to pay back the depositors’ money.