Crisis-Ridden Oriental Cooperative Offers Land Plots to Settle Deposit Crisis

The crisis-ridden Oriental Savings and Credit Cooperative has proposed resolving its deposit liabilities by offering land plots to depositors instead of returning their savings.

Sudhir Basnet, the chairperson of the cooperative, previously proposed allocating 276 ropani of land in Gundu, Bhaktapur, to 632 depositors during a meeting with the Problematic Cooperative Management Committee. The committee approved the proposal under the condition that depositors would not be forced to accept land in lieu of cash.  

While Basnet refused to comment on the matter, Committee member Uddhav Prasad Timalsina stated that Basnet is currently plotting 32 ropani of land, which would settle deposits worth Rs 504.8 million for 208 depositors. “As per Sudhir’s proposal, we are facilitating depositors who are willing to take the plots of land in exchange for their savings,” Timalsina explained.  

Previously, Oriental had distributed land plots in Gundu to 82 depositors. Currently, approximately 300 depositors have expressed interest in accepting land plots, and the committee is managing the necessary procedures for planning and allocation. According to Timalsina, the plan could help resolve Rs 1.72 billion of the cooperative’s deposit liabilities, with the remaining amount to be settled through the auctioning of assets in Parasi and Hetauda.  

The government had declared Oriental Savings and Credit Cooperative crisis-ridden twice — in 2017 and 2022. However, when the government moved forward with the property auction process, Basent moved to the Supreme Court and obtained a favorable ruling. The verdict stated that the cooperative could not be declared problematic twice under new legislation. Following this decision, the cooperative’s file was returned to the Department of Cooperatives. The department requested a liability settlement plan, but Oriental failed to present one within the given timeframe, and its clarification was deemed unsatisfactory. Subsequently, the ministry, on the registrar’s recommendation, again declared the cooperative problematic.  

As per Section 104 of the Cooperatives Act, 2074, if a cooperative institution is unable to return its members’ savings, faces severe financial distress, or is found to have irregularities, the ministry may declare it problematic based on the registrar’s recommendation.  

A total of 4,249 members have claimed deposits worth Rs 3.19 billion from the cooperative so far. The committee’s data reveals that Rs 240 million has already been settled or refunded from the cooperative’s assets.  

Oriental had operated nine branch offices across the Kathmandu Valley, Nepalgunj, Pokhara, Dang, Surkhet, Biratnagar, and Itahari. The savings collected from the general public were primarily invested by Chairman Basnet in purchasing land and plots under the names of various companies and individuals. However, as the real estate market slowed down, Oriental faced severe financial difficulties, rendering it unable to return the deposits.