New Business Age

Co-operatives must Ensure 51 Percent Credit Flow to Productive Sector

  338 times read   2 min 13 sec to read
Co-operatives must Ensure 51 Percent Credit Flow to Productive Sector

May 27: At a time when the co-operatives are being criticized for investing in unproductive sectors including real estate, the Department of Co-operatives of the federal government has directed the cooperatives to channel 51 percent of their total credit to the productive sector.

Issuing the Unified Directive-2079 on Thursday, the department directed co-operatives to categorize the loans on the basis of sectors and disburse at least 51 percent of the total loan in production and income-generating businesses. The co-operatives are not allowed to operate hydropower projects, hospitals, schools, campuses, hotels, petrol pumps and other projects without mentioning them in their statute.

The directive mentions that the members of co-operatives will not be allowed to invest their savings and the outstanding loan flow should not exceed 5 percent of the total assets. The directive also stipulates that the elected or nominated public office bearers directly involved in the registration and regulation of co-operatives or the employees working in the government bodies, state government or local level offices cannot be elected or nominated in the Board of Directors or Accounts Supervision Committee of the co-operatives.

The department also instructed to make arrangements for immediate resignation from such posts by government employees and the vacant posts should be filled in the upcoming general assembly through by-elections.

Earlier, the then registrar of the department Jhalakaram Adhikari had issued an 88-point Unified Directives on February 13. Three months later, Registrar Rudra Prasad Pandit reissued the directives. The new directives were reduced to 35 points. However, the new directives cover most of the old issues.

Registrar Pandit claimed that the new directives had to be issued as the previous directives were not clear. He said, “Earlier, it was found that the directives were issued hastily without the consent of the ministry. Due to this, precise and clear instructions were issued again to facilitate their implementation.”



No comments yet. Be the first one to comment.