Cooperatives reform taskforce unveils key findings and recommendations

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Cooperative scams including cooperatives like Shiva Shakti have duped the money of tens of thousands of people in Nepal.

Kathmandu, September 15

The Cooperative Sector Reforms Recommendation Taskforce, 2023, has submitted its report, suggesting the short-term, mid-term and long-term measures to address the challenges surfaced in the country’s cooperative sector.

The government had formed the taskforce on May 9.

The task force suggests that if a loan surpasses 10 percent of the total amount allocated to an individual or household, it should be resolved within a span of six months. Similarly, members of the board of directors, audit committee, and management who belong to the same household or are close relatives should be separated within a three-month period. This is due to the potential impact on services resulting from the conflict of interest involving such individuals.

The taskforce has also recommended that the transformation of investment of the cooperatives into different companies, mart and apartments should be managed into the liquid property within a year. Furthermore, the cooperatives which failed to pay back the depositors should pay them even by transforming the other sectors’ investment and fixed assets of the founders.

The cooperatives should formulate their detailed plans of action on risk management and inform their regulatory body and central association.

The study taskforce has suggested that the passports of the responsible office-bearers and those involved in the management body should be kept on hold if the depositors’ collection was embezzled. The taskforce has also recommended clearance of the financial transaction, lending, saving and loan imbursement within the parallel organisations within a year.

Frequent monitoring of the cooperative as well as feedback and reward and punishment are recommended by the taskforce.

The taskforce has concluded that shifting the investment by the cooperatives that are run by the family members towards real estate, apartment, stores and different other companies has caused problem in the cooperative organisation at present.

Consultations and regular meetings among the board of directors and management team of the cooperative as well as regular information dissemination is also suggested to ensure transparency of the organisations.

National Planning Commission Member Jaykant Raut led the taskforce with Secretary at the Ministry of Land Management, Cooperative and Poverty Alleviation Gokarna Mani Duwadi, Problematic Cooperatives Management Committee Chairman Kashi Raj Dahal and others as its members.

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