NRB Proposes Five-Point Plan to Address Problems in Financial Cooperatives
The Nepal Rastra Bank (NRB) has put forward a five-point plan to tackle issues plaguing problematic financial cooperatives. During a meeting of the parliamentary probe special committee, which was formed to investigate the misuse of depositor savings in financial cooperatives, NRB Governor Maha Prasad Adhikari presented these suggestions.
Governor Adhikari outlined a phased approach for returning depositor savings: up to Rs 100,000 in the first phase, up to Rs 500,000 in the second phase, and more than Rs 500,000 in the third phase. He also recommended forming a dedicated group to resolve the issues and adopting measures similar to those used for problematic banks. Additionally, he stressed the need for necessary arrangements for cooperatives that have operated without geographic restrictions.
Anil Chandra Adhikari, Chief Executive Officer of the Credit Information Bureau, suggested creating an integrated information system at the Bureau and establishing separate information bureaus for insurance and cooperatives. Sunil KC, President of the Nepal Bankers' Association, emphasized the urgency of resolving these issues to prevent similar problems in other financial institutions.
Dr. Jay Kanta Raut, Coordinator of the former cooperative suggestion taskforce, attributed the growing problems in the cooperatives sector to the lack of implementation of recommendations. He pointed out that most financial cooperatives facing issues are operating against cooperative norms, values, and principles. Experts also highlighted the need for establishing a Credit Recovery Tribunal for the financial cooperatives sector.
Special Committee Chairperson Surya Bahadur Thapa noted that discussions have not yet started on whether the government should compensate victims of cooperative failures. The focus remains on ensuring that cooperatives fulfill their responsibility to return depositor savings. The committee plans to invite officers who have previously served as registrars of the Cooperative Department for further discussions, as well as hold meetings with victims of financial cooperatives.
