Troubled Ambe Koshi Cooperative begins refund process for small depositors

By Shahidhar Parajuli

Biratnagar, Apr. 14: The Koshi Province government has formally begun the process of refunding savings to depositors affected by troubled cooperatives, marking a significant step in addressing financial irregularities in the sector.

In the first phase, 287 depositors of the Ambe–Koshi Savings and Credit Cooperative, based in Itahari, Koshi Province, will receive their savings.

The refunds are being administered by the Problematic Cooperative Management Committee, formed under the provincial Ministry of Industry, Agriculture and Cooperatives. Priority has been given to depositors with savings of less than Rs. 20,000 in this initial phase.

The cooperative, which has its central office in Itahari, counts 9,559 shareholders and holds share capital exceeding Rs. 40.6 million. However, it is liable to return approximately Rs. 426.09 million to depositors. So far, only 1,173 depositors have filed official claims, amounting to around Rs. 248.8 million, according to the committee.

Investigations revealed that the cooperative’s former chair, Phadindra Bahadur Purbachhane, is the principal defaulter. He allegedly borrowed nearly Rs. 200 million from the cooperative and misappropriated the funds for personal use. The misuse of such a substantial amount by the chairperson is said to have triggered the institution’s financial crisis.

Following serious financial irregularities, the provincial government declared the cooperative “problematic” in mid-December, 2024. Subsequently, the management committee took control of more than 2,000 files and launched an in-depth investigation

After assuming responsibility, the committee suspended the authority of the board and staff, and froze 42 land plots registered in the names of the cooperative and its operators in an effort to recover funds. It also issued a 35-day public notice urging borrowers to repay their loans. Preparations are in the final stage to auction properties belonging to three defaulters who have failed to settle their dues.

At present, Rs. 13.8 million has been deposited in the cooperative’s bank account. In addition, liabilities worth Rs. 19 million have been managed through the adjustment of savings and loans, the committee said.

According to Minister for Industry, Agriculture and Cooperatives, Israel Mansuri, a total of Rs. 2.857 million will be refunded to 287 depositors in the first phase. He described the initiative as exemplary for the entire country.

The minister added that once payments to depositors with savings below Rs. 20,000 are completed, the process will move forward to reimburse those with deposits of up to Rs. 100,000.