The number of cooperatives failing to return public deposits is steadily increasing, triggering protests from depositors across the country. However, the key institution responsible for regulating savings and credit cooperatives—the National Cooperative Regulatory Authority—remains ineffective due to the government’s delay in appointing its leadership.

Although the authority was formally established more than three months ago through an ordinance amending the Cooperatives Act, the government has yet to appoint a permanent chairperson or fill several member positions. This leadership vacuum has rendered the authority practically non-functional at a time when regulatory oversight is urgently needed.

Initially, the government had appointed Arjun Prasad Pokharel, then Secretary at the Ministry of Land Management, Cooperatives and Poverty Alleviation, to inaugurate the authority and assume the role of chairperson. However, his retirement two weeks ago has left the post vacant, and the ministry has not yet initiated the official appointment process.

“Even if the process strictly follows the law, it takes at least three months to appoint officials,” an under-secretary at the ministry said. “It’s concerning that this has not been treated as a priority.”

Minister for Land Management, Cooperatives and Poverty Alleviation Balaram Adhikari acknowledged the delay but attributed it to legal complications. “We faced legal hurdles earlier, which stalled the appointment process,” he said. “However, we are moving forward soon. Until then, the ministry’s secretary will handle the responsibilities of the authority.”

The authority was established on January 27, following the dissolution of the National Cooperative Development Board as per the ordinance. The amended Cooperatives Act (2074 BS) created a five-member body comprising representatives from various institutions: an Executive Director of Nepal Rastra Bank, a Joint Secretary overseeing cooperatives at the ministry, a chartered accountant, an expert, and the chairperson.

Currently, only two members—NRB’s Executive Director Guru Prasad Poudel and the ministry’s Joint Secretary Madan Koirala—have been appointed. The law requires that the chairperson be selected by a committee coordinated by the chairperson (or a designated member) of the Public Service Commission. Other committee members include a former Finance Secretary and an expert with at least 15 years of experience in economics, finance, law, or cooperatives.

Initially, the ordinance had specified a former governor of Nepal Rastra Bank as part of the selection committee. However, after former governors declined to join, a replacement bill was introduced in mid-April to substitute the position with a former Finance Secretary.

As per the law, the selection committee must issue a 15-day public notice inviting applications. It can then recommend three eligible candidates to the government, from which the cabinet appoints the chairperson.

The qualifications for the chairperson include a master’s degree in economics, commerce, management, accounting, law, or cooperatives, and either a gazetted first-class government position or at least 15 years of experience in a bank, financial institution, or cooperative.

For the expert and chartered accountant positions, the law requires at least a master’s degree in the relevant field and 10 years of professional experience in a relevant organization.