Cooperatives, operators misusing deposits will face music: Minister Adhikari

By Kedar Timalsina,Banepa, Mar. 4: Minister for Land Management, Cooperatives and Poverty Alleviation Balram Adhikari has said that all the cooperatives and their operators will be brought under legal action if they are found misusing the depositors’ funds.

Speaking at the inauguration of the Silver Jubilee Celebration of Jyoti Mirmire Collective Savings and Credit Cooperative in Banepa on Monday, Minister Adhikari said that misinformation about cooperatives was widespread. 

“There are rumours that all cooperatives are fraudulent and that people should not save money in them. Similarly, there is a misconception that borrowers  do not need to pay their loans,” Minister Adhikari said. 

He urged borrowers to uphold honesty and repay their loans.

The government has recently issued a notice stating that if someone does not pay the loans taken from cooperatives, the assets of their entire family will be frozen, he said. Similarly, those planning to go abroad will have their passports blocked, he added.

Minister Adhikari said that the government had begun investigating fraudulent cooperatives. He assured that wrongdoers would be prosecuted and their assets confiscated to reimburse affected depositors.

“On October 29, 2024, we refunded the savings of 6,500 depositors. We are now preparing to return more savings soon. The government will identify the capital and assets of troubled cooperatives, freeze them and use them to repay the depositors,” he said.

Stating that various concerns have arisen in the cooperative sector, Minister Adhikari said it was important to focus on facts. “Cooperatives are a foundation for livelihoods, economic progress and the nation’s growth. If we fail to manage them properly, we will miss the benefits they offer,” he said.

He pointed out that while cooperatives are intended to serve a common goal, some have misused self-regulations for personal gain. “This has created doubts even about well-functioning cooperatives,” he said. 

According to him, of the 31,400 cooperatives registered in Nepal, only around 500 might have been involved in wrongdoing. He also said that following public concern over cooperatives, the government introduced an ordinance to address the grievances of cooperative victims and stakeholders. The government is advancing cooperative regulation through the ordinance, which will establish a Cooperative Regulatory Authority, he added.

He said that outdated and complicated laws have caused difficulties and said the government amended 29 laws through six different ordinances to address these issues. He also highlighted that the government was preparing new laws, including amendments to the Land Revenue Act and the Survey Act.

At the event, the cooperative’s chairman, Uddhav Sapkota, shared that their cooperative, which started with just Rs. 28,000, has now 21,000 members with a transaction volume of Rs. 1.3 billion. He added that the cooperative is implementing various programmes for the welfare of its members.