Translate words into real action

Published On: January 10, 2024 07:35 AM NPT By: Republica  | @RepublicaNepal

Acknowledging the failure of the government to address the grievances of a large number of victims of cooperatives even after a long time, Prime Minister Pushpa Kumar Dahal on Monday directed the Ministry of Finance (MoF) to come up with a concrete proposal to address the issue. This is a step in the right direction as hundreds of thousands of member depositors of cooperatives have been suffering from the misappropriation of their deposited amount by the operators of various cooperatives for almost a decade. Oriental Cooperative and Guna Cooperative were among the first ones to swindle billions of rupees of the depositors. In the years that followed, Civil Cooperative failed to return the money of thousands of its depositors. The then chairman of the cooperative Ichchha Raj Tamang is serving a jail term on this charge. As the government failed to take any effective measures to avoid such a situation, a large number of other cooperatives fell into financial trouble in the name of not having adequate liquidity with them. Over a hundred multipurpose, savings and credit cooperatives including Tulasi, Sumeru, Shiva Shikhar, Maa Ambe, Swastik, Societal, Kohinoor, Pashupati and Gautam Shree, among others, have been listed as problematic at various government agencies during this period.   

But the government has been dilly dallying to address the concerns of the victims by just forming committees and preparing reports and guidelines, without delivering even a single progress in any of these cases. The government formed a Cooperatives Asset Management Committee in 2015 to settle the issues of the problematic cooperatives and has been allocating a budget of around Rs 30 million every year. But the committee’s work was just limited to updating the problematic cooperatives time and again, without fulfilling the task for which it had been set up.  Yet another committee formed by the government to address the problems related to cooperatives submitted its report making necessary recommendations a few months ago. However, its recommendations are yet to be implemented even as more such cooperatives are falling into trouble. Ironically, the Bagmati Provincial government on Sunday formed yet another panel to resolve the issues of cooperatives. The three-member committee led by Prashant Adhikari has been entrusted with the responsibility to study the issues of cooperatives and make recommendations for the management of the cooperatives that have fallen into financial crisis.

Despite all these efforts made by the government to spare the blushes, only the depositors victimized by a handful of cooperatives have been relieved as of now. In the meeting held at the Prime Minister’s Office on Monday, Prime Minister Dahal expressed his concern over the victims of the cooperatives. He has directed Finance Minister Dr Prakash Sharan Mahat to develop a concrete plan to address their actual problems. As suggested by the Finance Minister Dr Mahat, we believe that the government should formulate laws that allow Nepal Rastra Bank to regulate the cooperatives as well. But there is a caveat: Mahat’s suggestion can still be put into question as the central bank has already raised its hand from intervention over the cooperatives that numbered more than 30,000. Cooperatives, in principle, are supposed to be self-regulated by the members themselves. Given that the norm has been breached and the money collected from the people at the grassroots level has been put at risk, some regulations are imperative. While the sector’s main regulator – Department of Cooperatives – appears almost helpless and the central bank is already overloaded to look after the money market and regulate banks and financial institutions, the government might consider setting up a separate oversight agency as suggested by the government-formed committee a few months ago. It is high time the prime minister translates his pledges to address the issues of cooperatives into real action. 

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