NRB Furnishes Five-Point Suggestion to Address Problems of Problematic Cooperatives

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NRB Furnishes Five-Point Suggestion to Address Problems of Problematic Cooperatives

KATHMANDU: The Nepal Rastra Bank (NRB) has presented five-point suggestions to address the issues of problematic financial cooperatives.

Speaking at a meeting of the parliamentary probe special committee, formed to investigate the misuse of depositors' savings in financial cooperatives, NRB Governor Maha Prasad Adhikari on Monday shared that the problems in the cooperative sector could be resolved by following the five-point suggestions.

Governor Adhikari suggested returning the savings of the depositors in three phases: up to Rs 100,000 in the first phase, up to Rs 500,000 in the second phase, and amounts over Rs 500,000 in the third phase.

The NRB has proposed forming a dedicated group to resolve these issues and to adopt measures similar to those used in addressing the problems of troubled banks. He also advised making necessary arrangements for cooperatives that have operated without geographical restrictions.

Anil Chandra Adhikari, Chief Executive Officer of the Credit Information Bureau, suggested establishing an integrated information system at the Bureau and creating separate information bureaus for insurance and cooperatives.

Sunil KC, president of the Nepal Bankers' Association, warned of potential problems in other financial institutions similar to those faced by cooperatives and emphasized the need for prompt resolution.

Dr Jay Kanta Raut, coordinator of the erstwhile cooperative suggestion taskforce, explained that the problems in the cooperative sector are increasing due to the lack of implementation of suggestions. He noted that most financial cooperatives are operating against the norms, values, and principles of cooperatives.

Experts emphasized the need for establishing a Credit Recovery Tribunal in the financial cooperatives sector.

Chairperson of the Special Committee, Surya Bahadur Thapa, stated that the committee has not yet started discussions on whether the government should compensate the depositors of the troubled cooperatives. The focus remains on the cooperatives' primary responsibility to return the depositors' savings.

Former registrars of the Department of Cooperatives who have served since 2048 BS have been invited for the next meeting scheduled for Tuesday, July 9. Additionally, discussions will be held with victims of the financial cooperatives in future meetings. -- RSS

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